Risk markets in Asia are building positive momentum despite the flat sessions on Wall Street overnight although all eyes are on Japan as their longer dated bond yields spike again while the fiscal situation in the US is deteriorating the Trump regime continues to ram through its wealth redistribution tax bill that will enshrine trillion dollar deficits forever. In currency markets, the USD is losing ground fast particularly against Yen while Euro and Pound Sterling make new weekly highs as the Australian dollar remains robust above the 64 cent level despite yesterday’s cut by the RBA.
Oil markets are trying to stabilise with Brent crude breaking out above the $66USD per barrel level in early trade while gold is successfully fighting back from its recent decline, now extending above the $3300USD per ounce level this afternoon:
Mainland Chinese share markets did better in morning trade and are sliding back in the afternoon session with the Shanghai Composite up just 0.2% while the Hang Seng Index has gained more than 0.5% to almost push above the 24000 point level. Japanese stock markets are the odd ones out on the selloff in bonds and the strengthening Yen however with the Nikkei 225 down more than 0.5% to 37328 points while trading in the USDPY pair has seen a further move lower as it retraces well below the 144 level:
Australian stocks have put in another solid session to extend its wins with the ASX200 up 0.5% at 8386 points while the Australian dollar has held around the mid 64 level to match its post RBA meeting move with markets keeping the Pacific Peso contained for now:
S&P and Eurostoxx futures are sliding back further going into the London session with the S&P500 four hourly chart still showing a slowdown here in short term momentum in the wake of the Moody’s cut, as price heads back down to the 5900 point level:
The economic calendar is relatively quiet again tonight although watch out for the latest UK inflation numbers, more Fed speeches and some longer dated Treasury auctions.