Asian Open: Tech stocks continued to slide, RBA’s SOMP up next

Thursday US cash market close:

• The Dow Jones Industrial fell -518.17 points (-1.45%) to close at 35,111.16
• The S&P 500 index fell -111.94 points (-2.44%) to close at 4,477.44
• The Nasdaq 100 index fell -638.627 points (-4.22%) to close at 14,501.11

Asian futures:

• Australia's ASX 200 futures are down -78 points (-1.12%), the cash market is currently estimated to open at 7,000.00
• Japan's Nikkei 225 futures are down -260 points (-0.96%), the cash market is currently estimated to open at 26,981.31
• Hong Kong's Hang Seng futures are down 0 points (0%), the cash market is currently estimated to open at 23,802.26
• China's A50 Index futures are down -5 points (-0.03%), the cash market is currently estimated to open at 14,764.78

Wall Street continued to suffer overnight in the realisation that all is not well in in the tech world. Meta’s dire earnings outlook weighed heavily on the Nasdaq which saw the futures market fall over -4% by the day’s low. Prices recouped just under half the day’s losses heading into the close but.

EUR strongest major after hawkish ECB

The euro was the strongest major following ECB’s meeting. Whilst policy remained unchanged the press conference revealed how unanimously ‘concerned’ members were with rising inflation and Lagarde did not say this time that a hike in 2022 was ‘unlikely. Whilst this was not an outright hawkish meeting as such, it was a less dovish meeting which paves the way for the narrative to be shifted at future meetings. And that really quite hawkish for the ECB. 

To celebrate, EUR/USD rose over 1% during its most bullish day since December 2020 and closed above 1.14. The US dollar index fell for a fifth consecutive day to a 13-day low. EUR/AUD rose to an 8-week high.

USD/JPY appears on the cusp of breaking above 115

Momentum has turned higher for USD/JPY since finding a low at 114.13 and now trade above the 50, 200-day eMA’s and weekly pivot point. Yesterday’s high closed just below the monthly pivot point and today we are seeking a break above 115 to assume trend continuation. Of course, keep in mind that today is NFP day so volatility may be thin and breakout initially fickle, but if the data doesn’t disappoint as much as expected we could have a decent breakout on our hands.

RBA’s monetary policy statement is scheduled for 11:30 AEDT

At their meeting earlier this week RBA’s Governor Philip owe hinted at an earlier rate hike, and the RBA vowed to do ’what is necessary’ to maintain low and stable inflation. Yet alongside comments that Lowe continues to see the inflation situation in Australia as different to New Zealand and the US, ush comments appear to be a hedge at best as opposed to that of a Governor with their finger on the hike button. Still, there are expectations that the RBA will upgrade their inflation forecasts today and to what degree they are raised should shed some light as to how close to that hike button (or not) Dr Lowe really is.

ASX 200 tech stocks expected to feel the heat

The ASX 200 printed a small bearish inside day yesterday but did manage to hold above 7043 support. As expected, technology stocks were the weakest performers (down -5.9%) and is likely to be the case today with Nasdaq futures falling -3.8% yesterday. The utilities sector (XUJ) probed its year-to-day high yesterday, a break above which will take the sector to a 15-month high. Of its constituents, APA Group shows potential to hit a new high for the year after rallying from its 200-day eMA for three days and closing at

ASX 200: 7078 (-0.14%), 03 February 2022

• Utilities (1.63%) was the strongest sector and Information Technology (-5.88%) was the weakest
• 3 out of the 11 sectors closed higher
• 8 out of the 11 sectors closed lower
• 4 out of the 11 sectors outperformed the index
• 27 (13.50%) stocks advanced, 166 (83.00%) stocks declined

Outperformers:

• +5.24% - Mercury NZ Ltd (MCY.AX)
• +4.63% - Genesis Energy Ltd (GNE.AX)
• +4.36% - Insignia Financial Ltd (IFL.AX)

Underperformers:

• -14.7% - Novonix Ltd (NVX.AX)
• -9.63% - Zip Co Ltd (Z1P.AX)
• -8.96% - Imugene Ltd (IMU.AX)

Up Next (Times in AEDT)

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