Macro Afternoon

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Asian markets are quite mixed again in growing frustration at Wall Street’s response to the US Congress debt ceiling negotiations with Fitch announcing the US credit rating is on negative watch. Currency markets remain in strong USD mode as the Australian dollar makes a new monthly low well below the 66 cent level while Yen and Euro also go lower.

Oil prices are holding on to their overnight gains with Brent crude just above the $78USD per barrel level while gold has remained depressed, currently holding just below the $1960 level as the $2000USD per ounce level becomes a distant memory:

Mainland Chinese share markets are selling off again with the Shanghai Composite down over 0.7% to 3181 points while the Hang Seng is in full rout, down more than 2% to break through the 19000 point level, currently at 18647 points. Japanese stock markets however are not joining in on the selling fun with the Nikkei 225 actually closing 0.4% higher at 30820 points helped by a weaker Yen as the USDJPY pair slipping slightly higher to the mid 139 level:

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Australian stocks were in full flight mode as well with the ASX200 closing more than 1% lower at 7136 points. The Australian dollar is nearly in freefall having broken the 66 cent level overnight for a new monthly low, now threatening the 65 handle vs USD:

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Eurostoxx and S&P futures are up slightly, around 0.2% going into the London open with Wall Street still on tenterhooks with the lack of debt ceiling negotiations. The S&P500 four hourly chart is showing the breakdown to the 4100 point level still has room to grow with short term momentum readings nicely oversold:

The economic calendar has two big releases tonight – the German and US 2Q GDP print estimate.

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