Wall Street wobbled once more on a possibly banking contagion that has overshadowed earnings season with tonight’s FOMC meeting also getting trader’s rambuctius about USD. European stocks reopened after the May Day holiday but were also spooked leaving Asian bourses likely to open down today. The Australian dollar round tripped some of its post RBA surge to fall back slightly below the 67 cent level while other undollars lifted as US economic concerns weighed, with Euro still unable to get above the 1.10 handle. 10 year US Treasury yields pulled back to a monthly low at the 3.4% level while oil prices become further depressed with Brent crude off nearly 5% to make another new monthly low at the $75USD per barrel level. Gold finally broke out above the $2000USD per ounce level on USD weakness.
Looking at share markets in Asia from yesterday’s session where Chinese share markets were still closed for May Day holidays while the Hang Seng chugged along quietly, up 0.2% and still failing to get above the 20000 level, closing at 19953 points. After closing shy of the 20000 level on Friday the daily chart is still showing resistance building at the 20500 point level before this recent rollover as price action returns to the start of year correction phase. While this small bounce may have legs, watch for any break below the 19000 point level as an ominous rollover sign:
Japanese stock markets were also listless after a big surge in the previous session with the Nikkei 225 up only 0.1% at 29157 points. Futures are indicating a strong pullback on the open in line with the falls on Wall Street overnight that should take some steam out of this move higher after daily momentum become overbought. Price action is likely going to test the low moving average area first and then could threaten trailing ATR support if risk correlations move higher:
The full text of this article is available to MacroBusiness subscribers