Wall Street was almost unphased overnight by the dual NFP release as US unemployment jumped to a four year high, triggering a rally in US bonds, while the latest UK unemployment figures weren’t rosy either with speculation the BOE may move to easing its rates this week. The USD remains under duress against most of the majors with Euro almost cracking the 1.18 level while Pound Sterling and Canadian Loonie made new monthly highs. The Australian dollar drifted slightly below the mid 66 cent level again with another weak session but remains firm.
Looking at stock markets from Asia from yesterday’s session, where mainland Chinese share markets saw strong selling in afternoon trade with the Shanghai Composite down more than 1% to almost cross the 3800 point level while the Hang Seng Index also accelerated its recent falls with a near 1.5% drop to well below the 26000 point level.
The daily chart of the Hang Seng Index shows a complete fill of the March/April selloff with a resumption of buying above 26000 points as momentum tried to build but failed to push aside resistance. The latest small bounce off support does not have a lot of momentum here so I am wary of a dead cat bounce which is forming:
