Nikkei rips higher despite softer China data
While end-of-month flows may have played a part, risk assets have performed very well today during the Asian time zone, led by the Nikkei, despite mixed PMI data from China.
Share this:
China's NBS Services PMI dropped by 7.3ppt to 45.2, the lowest reading since February 2020, as the spread of the Delta variant and China's Covid-zero strategy triggered lockdowns that weighed on travel accommodation, catering, and entertainment.
The Manufacturing PMI fell to 50.1 in August vs. consensus expectations of 50.2. The production and construction sub-index held up well, indicating limited impact from the Covid outbreak on production and construction activity. As the Delta outbreak in China is now under control, a rebound in the China PMI data is expected in September.
There is a growing sense that Federal Reserve Chairman Powell's speech at Jackson Hole was more dovish than expected. The severing of the link between tapering and rates lift-off suggests rates stay lower for longer.
Clouding the Japanese domestic picture, a fifth wave of the virus and a ruling party leadership election on September 29 after Prime Minister Yoshihide Suga's popularity plunged due to scandals and his handling of the Covid-19 pandemic.
Nonetheless, the Nikkei futures have closed over 1.50% higher today at 28180, just below a layer of short-term horizontal resistance at 28250/270. Should the Nikkei break and close above 28250/70 and then above trend channel resistance at 28,700, it would signal the correction from the February high is complete, and the uptrend has resumed.
Long Nikkei positions should be considered in this instance, targeting a retest and break of the 30715 year-to-date high.
Source Tradingview. The figures stated areas of August 31, 2021. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation
Latest market news
The complete CFD trading experience
Award-winning platforms, competitive spreads, low commissions and dedicated support.
We live and breathe the markets and are dedicated to helping traders realise their ambitions as we continue to set the industry bar.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
Nikkei threatens breakout as tech rebound broadens
Breakouts across the SOX and Nasdaq are being matched by rebounds across Asia, with the Nikkei now threatening to join the move.
Nasdaq 100 Forecast: Confidence Returns as the Index Challenges Record Highs
The trading week is getting underway with renewed bullish momentum across Nasdaq. This is reflected in today's session, where the index has gained more than 2.5%, highlighting a buying bias that has not been observed with this level of strength in several weeks.
Nasdaq breakout builds as crude falls and chip stocks surge
Lower oil prices, semiconductor strength and improving technical momentum are helping Nasdaq futures overcome a hostile backdrop of higher Treasury yields and a stronger US dollar.
StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation.
StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.