- Australia's ASX 200 futures are down -2 points (-0.03%), the cash market is currently estimated to open at 7,367.90
- Japan's Nikkei 225 futures are down -130 points (-0.44%), the cash market is currently estimated to open at 29,558.33
- Hong Kong's Hang Seng futures are down -247 points (-0.96%), the cash market is currently estimated to open at 25,403.08
- China's A50 Index futures are down -49 points (-0.31%), the cash market is currently estimated to open at 15,517.69
UK and Europe:
- UK's FTSE 100 index fell -35.77 points (-0.49%) to close at 7,291.20
- Europe's Euro STOXX 50 index fell -0.68 points (-0.02%) to close at 4,400.81
- Germany's DAX index rose 3.27 points (0.02%) to close at 16,251.13
- France's CAC 40 index rose 4.25 points (0.06%) to close at 7,156.85
Wednesday US Close:
- The Dow Jones Industrial fell -211.17 points (-0.58%) to close at 35,931.05
- The S&P 500 index fell -12.23 points (-0.27%) to close at 4,688.67
- The Nasdaq 100 index fell -1.697 points (-0.01%) to close at 16,308.07
US equities lower on rate-hike bets
With the buzz of retail sales behind it, Wall Street was reminded of inflationary pressures which weighed on equity markets yesterday. Housing starts also fell and the construction backlog continued to rise. Expectations for the Fed to raise rates in June is now 74.1%, up from 46.5% on Tuesday, the S&P 500 fell about -0.4% early session to close around -0.1%, the Dow was off -0.6% and the Nasdaq was effectively flat.
UK inflation likely ticks the final box for a BOE hike
The British pound was given another boost with a strong inflation print, adding calls for a December rate hike following Tuesday’s positive employment report. The Bank of England had refrained from raising rates at their last meeting due to an ‘incomplete’ employment picture, and Tuesday’s data showed the million furloughed employees did not weaken the employment situation considerably when the furlough scheme ended. CPI rose 1.1% in October (0.3% previously) or 3.4% y/y (3.1% previously) whilst core CPI rose 0.7% n/n (0.4% prior) and 3.4%y/y (up from 2.9% in September whilst core CPI.
EUR/GBP fell to its lowest levels since February 2020 on the dual combination of BOE hike bets and the thawing of tensions between UK and EU over Northern Island. The pound also made notable gains against commodity currencies with GBP/AUD rising around 1% to a 1-moth high.
Canada’s CPI also considerably above their central bank’s target although, as my colleague Perry points out, as it was roughly in line with expectations the Canadian dollar weakened as traders booked profits.
The Yen regains inflows
The Japanese yen was broadly higher against its major peers as it sucked in safe-haven inflows during the mildly risk-off session. We think it was mild as the sell-off in stocks was hardly screaming bear market, although gold did rise and the yen was relatively volatile.
Of the yen pairs we like, AUD/JPY could be of most interest to bears. A decent bearish trend has developed since the market topped out, with Evergrande woes being the catalyst to finally bring prices back below the May high. After finding support at the 38.2% Fibonacci ratio, it pulled back the monthly pivot and formed a bearish pinbar, and now bearish momentum has returned. We suspect its next stop is 82.13 support and we’d consider bearish setups within yesterday’s range, or beneath its low.
7400 key for the ASX 200
The profit margin squeeze on CBA saw the stock plummet -8% yesterday and weigh on the broader sector and index. The ASX 200 fell to a 4-day low and probe (yet close above) September trend support. It’s unclear whether yesterday’s earnings report is now prices into the stock, so we are equally open to the ASX rebounding from said support or breaking that trendline. But we would prefer to see prices break above 7400 before putting our bullish hats on.
ASX 200: 7369.9 (-0.68%), 17 November 2021
- Information Technology (1.64%) was the strongest sector and Financials (-2.74%) was the weakest
- 9 out of the 11 sectors closed higher
- 2 out of the 11 sectors closed lower
- 9 out of the 11 sectors outperformed the index
- 125 (62.50%) stocks advanced, 63 (31.50%) stocks declined
- 60% of stocks closed above their 200-day average
- 55% of stocks closed above their 50-day average
- 48% of stocks closed above their 20-day average
- + 8.29%-Uniti Group Ltd(UWL.AX)
- + 5.96%-Nickel Mines Ltd(NIC.AX)
- + 4.52%-Appen Ltd(APX.AX)
- -8.57%-Nufarm Ltd(NUF.AX)
- -8.07%-Commonwealth Bank of Australia(CBA.AX)
- -4.55%-Chalice Mining Ltd(CHN.AX)
- -4.22%-Iluka Resources Ltd(ILU.AX)
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