Nasdaq 100, ASX 200, ECB, Chinese language CPI, US CPI, Technical Evaluation – Asia Pacific Indices Briefing
- Nasdaq 100, tech shares sink as one other central financial institution turns into extra hawkish
- Australia’s ASX 200 susceptible to Chinese language lockdowns, slowing world progress
- Will China CPI knowledge hold the PBOC on its toes amid stimulatory measures?
Thursday’s Wall Avenue Buying and selling Session Recap
Sentiment notably deteriorated on Wall Avenue wanting again to Thursday’s buying and selling session. Futures monitoring the Nasdaq 100, S&P 500 and Dow Jones fell 2.7%, 2.4% and 1.9% respectively. For all three of the main benchmark inventory indices, this meant the worst each day efficiency since Might 18th. With that in thoughts, what appeared to drive the pessimism?
You would need to return additional to the European session when the European Central Financial institution (ECB) introduced its newest financial coverage announcement. Till lately, the ECB was seen as a comparatively dovish central financial institution. President Christine Lagarde helped to additional downplay that notion amid rising inflationary pressures.
The ECB boosted inflation expectations whereas downgrading progress forecasts. It additionally introduced that it’s going to cease buying belongings beginning in July, with plans to lift rates of interest within the close to time period. Thus, one other central financial institution takes a flip to the hawkish facet, amplifying considerations about liquidity being drained from monetary markets and pushing up bond yields, undermining risk-sensitive belongings. Unsurprisingly, tech was one of many worst-performing sectors within the S&P 500 on Thursday – see chart beneath.
S&P 500 Sector Breakdown 6/9/2022
Information Supply: Bloomberg
Nasdaq 100 Technical Evaluation
On the each day chart, the Nasdaq 100 fell beneath near-term help, which was sitting round 12465. That has positioned the give attention to the Might low at 11491, which is sitting proper above the 100% Fibonacci extension at 11443. Additional losses over the remaining 24 hours might open the door to revisiting the underside from final month. In any other case, key resistance appears to be the 61.8% Fibonacci extension at 12904.
Nasdaq 100 Futures Each day Chart
Chart Created in TradingView
Friday’s Asia Pacific Buying and selling Session – Chinese language Inflation
The fairly pessimistic session on Wall Avenue is leaving the door open for an extension throughout Friday’s Asia-Pacific buying and selling session. Australia’s ASX 200 index could possibly be significantly susceptible as China lately resumed locking down as a part of Xi Jinping’s “Zero-Covid” coverage. The world’s second-largest economic system may even be releasing its newest inflationary figures.
Headline CPI is seen ticking larger to 2.2% y/y in Might from 2.1% prior. Costs on the manufacturing facility although are seen weakening to six.4% y/y from 8.0%. That is leaving the PBOC in a tough state of affairs because the nation employs a stimulatory coverage. Softer outcomes might increase sentiment if meaning additional measures, however markets additionally need to cope with US CPI over the remaining 24 hours.
ASX 200 Technical Evaluation
The ASX 200 has fallen over 4.6% from the Might 30th excessive, inserting the index nearer to a reasonably large zone of help that has been holding for over a 12 months. That is the 6747 – 6894 vary, which might stay in play and assist pivot costs larger. That may nonetheless depart the ASX in a broadly consolidative state, with resistance above at 7609 – 7650.
ASX 200 4-Hour Chart
Chart Created in TradingView
— Written by Daniel Dubrovsky, Strategist for DailyFX.com
To contact Daniel, use the feedback part beneath or @ddubrovskyFX on Twitter