A stronger than expected tertiary manufacturing survey saw USD rebound after a spate of weakness, with European shares faltering while Wall Street was able to break its recent trend for a positive result, albeit later in the session. Euro lead the charge by dropping straight down to the 1.09 handle with ECB President Lagarde commenting on inflationary expectations while the Australian dollar remained under pressure but failed to make a new session low as it held at the 67 handle. 10 year US Treasury yields lifted over 7 basis points to push through the 3.5% level while the commodity complex didn’t like the stronger USD with oil prices pulling back from their recent highs as Brent crude finished just above the $84USD per barrel level. Gold too felt the pressure with a break below the $2000USD per ounce level.
Looking at share markets in Asia from yesterday’s session where mainland Chinese share markets climbed sharply going into the close, with the Shanghai Composite up more than 1.3% to almost get through the 3400 point barrier at 3385 points while the Hang Seng has lifted even further, closing up 1.6% to 20782 points.The daily chart is showing resistance building again at the 20500 point level with daily momentum now getting into overbought mode, as price action wants to breakfree of the start of March position. The start of year correction may be over but still requires a substantial lift above the current level before calling it a new rally:
Japanese stock markets lost a little bit of confidence with the Nikkei 225 closing just 0.1% higher at 28514 points. The previous bounceback looked like a bull trap, but this may have more traction, taking out the March highs with futures indicating another lift on the open in line with the moves on Wall Street overnight. Daily momentum is now getting back into overbought conditions with support building at the 27000 point area:
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