Indices Market

AUD/USD made a minor recovery from its 13-month low late on Wednesday, but whether it can muster up the strength for a decent bounce likely sits in the hands of USD/CNH. Although the ASX 200 could be set for a bounce with the Nasdaq reaching a record high and the S&P 500 close to its own ATH.

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?

China's stock markets were given a nice bump on Monday after the Politburo announced an easing of policy stance. This allowed AUD/JPY and USD/JPY to deliver strong bounce from key support levels, as the yen weakened during a risk-on session for FX and commodities.

Investors are looking ahead of the all-important non-farm payrolls report on Friday. Ahead of this, there were little signs of waning appetite for risk, keeping the S&P 500 forecast and trend bullish. But as the index starts to drift higher and higher into overbought levels, investors will be wondering when the Trump trade will be fully priced in.

Today's growth figures are unlikely to force the RBA into any easing action, but it has been enough to weigh on the Australian dollar and ASX 200. And this could allow EUR/AUD to continue higher after a 4-day retracement.

What are the odds of a Deecember melt up in the S&P 500?

ASX 200 futures (SPI 200) were allowed to print a fresh record high on a daily-close basis. Yet 8500 remains a clear level of resistance, and one which prompted a potential bearish reversal pattern.

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.

So far, US stock investors appear unfazed by global softness in commodities and bond markets, even as the 10-year Treasury yield inches closer to 4.5%, reflecting a more hawkish interest rate outlook for next year. But with the dust settling on Trump’s election victory, could we finally see retracement to cause a bearish shift in the short-term S&P 500 forecast?

This week’s US inflation data may impact Wall Street but will likely have limited implications for European indices. But one factor that is certainly weight on sentiment on this side of the pond is political uncertainty in Germany. Against this backdrop, our DAX forecast is turning bearish in the short term, especially if the German index now breaks a key support area that it was testing at the time of writing.

Wall Street indices displayed their first signs of doubt following Trump’s election victory last week, with the Dow leading losses on Tuesday. Weak sentiment from China has also weighed on ASX futures overnight.

US index futures edged higher in early European trading, but after a strong two-day rally, momentum might slow ahead of the Federal Reserve’s rate decision. With a 25-basis-point rate cut fully priced in, the focus will shift to the Fed's tone on future cuts.

The rationale behind the US stock market rally is that Trump is seen as business-friendly and will be able to pass on his tax cuts through easily without much resistance from the democrats who have lost control of the senate.

With the US election now just one day away, things can turn rapidly across financial markets, particularly because this is turning out to be such a close election and the polls cannot and should not be trusted. Given the fact that the DAX has weakened in the last couple of weeks, this also argues against a sustainable recovery as the prior bullish momentum has been lost.

A brutal day for risk sent Wall Street indices lower on Thursday, but support levels and the tendency for stocks to rise on the week of a US election could help the S&P 500 and ASX 200. Assuming the wheels don't truly fall off first.

A less-dovish BOJ may have strengthened the yen while weak tech earnings weighed on Wall Street Thursday, but these patters could persist on Friday if they follow their usual pre-election path looking, according to historical data.