- Australia's ASX 200 futures are up 52 points (0.72%), the cash market is currently estimated to open at 7,277.20
- Japan's Nikkei 225 futures are up 140 points (0.5%), the cash market is currently estimated to open at 27,893.37
- Hong Kong's Hang Seng futures are down -165 points (-0.7%), the cash market is currently estimated to open at 23,623.93
- China's A50 Index futures are down -2 points (-0.01%), the cash market is currently estimated to open at 15,455.37
UK and Europe:
- UK's FTSE 100 index fell -39.47 points (-0.55%) to close at 7,129.21
- Europe's Euro STOXX 50 index fell -71.13 points (-1.7%) to close at 4,108.02
- Germany's DAX index fell -209.56 points (-1.35%) to close at 15,263.11
- France's CAC 40 index fell -86.12 points (-1.25%) to close at 6,795.75
Wednesday US Close:
- The Dow Jones Industrial rose 617.75 points (1.82%) to close at 34,639.79
- The S&P 500 index rose 64.06 points (1.42%) to close at 4,577.10
- The Nasdaq 100 index rose 113.045 points (0.71%) to close at 15,990.76
Equity markets shook off news of a second Omicron case in the US
US Employment claims were lower than expected whilst layoffs were at their lowest level in over 28-years. News that a second Omicron case had hit US shores failed to dent sentiment any further on Wall Street, with S&P 500 and Dow Jones both rising over 1.5%.
The Nasdaq recouped around 0.8% of Wednesday’s losses yet remained beneath the neckline of its head and shoulders top pattern on the daily chart. Support was found at the weekly S1 pivot and a decent break above yesterday’s high would invalidate the pattern, whilst a break of yesterday’s low keeps the pattern in play and targets 15,200.
Safe havens offered as risk-off tone recedes
Safe havens currencies JPY and CHF were the weakest majors overnight whilst GBP and NZD were the strongest during the relatively upbeat session. But perhaps a clearer indication that appetite for risk is improving is if we see CHF/JPY rally. Its move from the November high appears corrective and the retracement is hovering around the June highs, so we’re looking out for bullish momentum to return and signal a bout of risk-on.
The dollar is torn between hawkish Fed and Omicron
Cast your mind back to last Friday, where two cases of the new Covid variant were confirmed in Hong Kong. The US dollar index fell over 2% during its worst session since March 2020. Yet since then, we have had surprisingly hawkish comments from Jerome Powel. So, if Omicron can be contained it opens up the doors for another round of dollar buying.
113 remains a key battleground on USD/JPY. It held above this key level on renewed Covid fears, so if those fears subside 113 makes a likely springboard for bulls. But it also keeps AUD under pressure as it flirts with 71c. On one hand the Aussie appears stretched to the downside and in need of a pullback but yield differentials don’t care for such logic – so look prepare for 70c on the Aussie if the dollar finally gets to enjoy that hawkish-Fed bid.
ASX 200 solidifies support at 7200
It is still early days in the month, but we are now pondering whether the low for December is already in place. We know that December is usually favourable for bulls looking at seasonal analysis, although it is usually the second half of December before Santa’s rally truly kicks in. And as Omicron is still touch and go, we are prepared for some choppy price action over the near-term. But technically a case is building for gains. A third bullish hammer formed over the past four days at the 200-day eMA, Wall Street closed higher and ASX futures point to a gap higher today. From here we would want to see prices hold above yesterday’s low and to rally above 7337. But if prices hold above yesterday’s high before they rally then its hints at a stronger up leg. A break above the 100-dy eMA assumes trend continuation.
ASX 200: 7225.2 (-0.15%), 02 December 2021
- Utilities (1.5%) was the strongest sector and Information Technology (-3.19%) was the weakest
- 4 out of the 11 sectors closed higher
- 7 out of the 11 sectors closed lower
- 4 out of the 11 sectors outperformed the index
- 62 (31.00%) stocks advanced, 123 (61.50%) stocks declined
- 53% of stocks closed above their 200-day average
- 27.5% of stocks closed above their 50-day average
- 20% of stocks closed above their 20-day average
- + 6.11%-Worley Ltd (WOR.AX)
- + 3.99%-AGL Energy Ltd (AGL.AX)
- + 3.13%-Fletcher Building Ltd (FBU.AX)
- -6.47%-Netwealth Group Ltd (NWL.AX)
- -6.08%-Afterpay Ltd (APT.AX)
- -5.87%-Orocobre Ltd (ORE.AX)
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