
China A50 resistance test looms as bonds flash expansion
Bond yields hint at recovery while economic data still lags. The A50 is testing a line in the sand that could set the tone for Chinese equities.

Bond yields hint at recovery while economic data still lags. The A50 is testing a line in the sand that could set the tone for Chinese equities.

PMI strength adds weight to the bullish case for China A50, though official data keeps the rebound debate alive.
Nikkei futures are on track for their most volatile day since August, which will please the large speculators that ramped up their short bets three weeks ago. Bur for a less bearish atmosphere in APAC, the China A50 has caught my eye for a potential long.
China’s policy pivot is turning heads and bosting markets, with Hang Seng and A50 futures charging ahead. As bulls eye breakouts, will this stimulus spark fizzle out or ignite a rally hotter than a Sichuan hotpot?
The Hang Seng has seen no fewer than six times already this year on the daily charts, and it looks like it wants to tally up a seventh.
A potential bearish reversal pattern suggests a drop to 7900 for the ASX, but only if it clears a support cluster first. China's A50 still looks solid above 13k to my eyes, despite yesterday's selloff.
The bounce for the ASX nay end up being short lived, but price action suggests bulls might sneak in a 'last hurrah' over the near term. Meanwhile the China A50 continues to hold its ground and hint at a bounce of its own.
Wall Street indices may be around their record highs, yet the Dow Jones has been knocked from its perch and considering its next leg lower. Yet I suspect buyers are lurking around the China A50 in anticipation of its next leg higher.
The China A50 is up an impressive 16% this week already thanks to the latest round of stimulus from China. While this helped the ASX to a degree, it likely needs a soft US inflation report to break and hold above record high.
We’ve seen plenty of short squeezes before that have quickly run out off puff. But with speculation swirling that policymakers may follow up Tuesday’s monetary policy easing with fiscal stimulus ahead of Golden Week holidays, that alone may be enough to promote further gains in the days ahead.
US yields were a touch lower with Jerome Powell saying that inflation is on the disinflationary path, ahead of key economic data from the US including ISM services, JOLTS and ADP employment reports. The ASX 200 and China look poised to move higher following a strong lead from Wall Street ahead of Independence Day.
China’s major stock market indices have been falling since the middle of May. With little in the way of a decent bounce higher, I continue to suspect one could be due.
China A50 stock futures have been hammered on Thursday, as have most other equity futures across Asia. The US dollar is breaking out as US Treasury yields push higher, seeing traders abandon riskier positions ahead of quarter-end. The baby is being thrown out with the bath water.
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