Hang Seng bleeds whilst FX focuses on Event risk
|Another day of clashes, another drop of 2% on the HK share benchmark.
There is no doubt that the HK protests have reached a boiling point and that steam is coming out of the 2019 rally in the Hang Seng level, very quickly.
The HK trading day approaches close with another 2% bleed in HK50 levels, amid ongoing escalation of tensions.
- Can this spill over into a whole-of-market ‘Risk-Off’ theme?
I don’t think so, I think that the risk sentiment is desensitised to the tensions because they have dragged on for so many weeks now.
- Nevertheless, I am a serious SELLER from this level 26,500, aiming at the 25,500 October low, for a target of 1,000 points.
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All eyes are on the NZD/USD looking for a follow through of Bidding, UK & US inflation data
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The wording from US Fed Jerome Powell testimony – is also critical for the sentiment strength for the USD.
RBNZ and NZD/USD:
The RBNZ held the benchmark New Zealand interest rates helping see a sharp jump above 0.6400 versus the Greenback as the pricing was skewered toward a cut leading into this meeting.
More unwinding in Short NZD/USD positions should be almost certain now that we have the clear forward guidance from the RBNZ Governor Orr.
- I expect the Kiwi Dollar price to form a base above 64c, and to move to 2nd Target at 0.6450.
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