There’s been more bounces and rebounds in markets this week than in a slow-motion Baywatch movie and here we are again with another “surprise” lift overnight to fill the gaps over systemic financial contagion. European shares rebounded more than 2% across the board despite the ECB raising rates by 50bps while Wall Street followed suit with futures firming on a 25bps rise by the Fed next. The USD at first came back against Euro but the union currency has held on to its meagre gains, likewise the Aussie dollar with all eyes still on bond markets as 10 year US Treasury yields lifted slightly after having one of their biggest drops in years, currently just above the 3.5% level. The commodity complex isn’t liking the volatility with oil prices nearly at two year lows as Brent crude finished just above the $74USD per barrel level while gold is holding on to its own monthly high with the shiny metal just below the $1920USD per ounce level.
Looking at share markets in Asia from yesterday’s session where mainland Chinese share markets fell sharply going into the close, with the Shanghai Composite down nearly over 1% to remain well below the 3300 point barrier at 3225 points while the Hang Seng has retraced yet again, closing 1.7% lower at 19203 points. The daily chart had been showing this rollover accelerating as price action retraced well below previous ATR support as momentum is still well deep into oversold territory. This correction won’t finish until we see at least one close above the high moving average:
Japanese stock markets remain unable to escape the downward volatility after a scratch session previously, with the Nikkei 225 closing 0.8% lower at 27010 points. The previous bounceback still looks like a bull trap, with futures indicating a small lift on the open due to the moves on Wall Street overnight. Daily momentum has been deeply oversold for sometime now with support under pressure at the 27000 point area which had been previously defended, so this will take a much bigger bounce to get moving again:
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