EQUITIES: Mostly Higher In Asia; Chinese Equities Rebound As PBoC Wades In
Major Asia-Pac equity indices are mostly higher following a positive lead from Wall St. and PBoC pledges of support for the Chinese economy, putting regional equity indices on track to snap a collective three-day streak of lower closes as seen in the MSCI Asia Pacific Index.
- The Australian ASX200 remains the sole index in the red today, dealing 2.0% lower at typing on losses in virtually every constituent sub-index. Energy and material names were notable underperformers, likely facing drag from energy and commodity prices having declined over the weekend (and over Monday’s Anzac Day national holiday).
- The CSI300 reversed earlier losses of as much as -0.6%, and sits 1.4% better off at typing. Chinese stocks received a boost early in the session after the PBoC renewed pledges to increase support for the economy while promoting the health and stability of financial markets, coming after Monday’s sell-off left Chinese benchmarks within ~10% of COVID-era lows by the close of the session. High-beta equities and tech stocks were notable beneficiaries of the improvement in sentiment, with Chinese liquor stocks leading gains (particularly Kweichow Moutai), while the ChiNext trades 2.0% higher at typing.
- The Hang Seng Index outperformed, adding 1.9% at typing. China-based technology stocks outperformed, with the Hang Seng Tech Index sitting 5.4% firmer, operating a touch below session highs at writing. On the other hand, the financials sub-index struggled, bucking the broader trend of gains in the index as Chinese authorities appear to be widening a crackdown on corruption in the industry.
- U.S. e-mini equity index futures deal 0.2% to 0.3% higher apiece at typing, reversing losses earlier in the session on tailwinds from aforementioned PBoC messaging.
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USDCAD TECHS: Eyeing Key Support
- RES 4: 1.2924 High Dec 22
- RES 3: 1.2871/2901 High Mar 15 / High Mar 8 and a key resistance
- RES 2: 1.2778 High Mar 16
- RES 1: 1.2669 20-day EMA
- PRICE: 1.2500 @ 16:35 GMT Mar 25
- SUP 1: 1.2498/99 Low Mar 25 / Jan 21
- SUP 2: 1.2475 2.0% Lower Bollinger Band
- SUP 3: 1.2454 Low Jan 19 and a key support
- SUP 4: 1.2387 Low Nov 10 2021
USDCAD traded to a new cycle low Friday. This week’s move lower and most recently, a break of 1.2552, the 76.4% retracement of the Jan 19 - Feb 24 rally, reinforces a bearish theme and signals scope for an extension lower. The focus is on the Jan 21 low of 1.2499 and 1.2451, the Jan 19 low. On the upside, initial firm resistance is seen at 1.2669, the 20-day EMA. A break of this average would ease current bearish pressure.
US: Public Opinion Of US Leaders Remains Low
The daily favourability ratings of US political leaders continues to reflect a mistrust of politicians amongst voters.
- the Real Clear Politics favourability rating also provides some context to President Biden's low approval rating. Both Republican and Democrat leaders continue to have low approval.
- Senate Minority Leader Mitch McConnell has the lowest rating with -34 approval. This reflects his association with the GOP establishment opposed by former president Donald Trump.
- Trump is the political 'leader' with the highest favourability with -6.1 but he is only marginally ahead of President Biden who sits at -9.2.
Favourability Ratings: US political Leaders Real Clear Politics
AUDUSD TECHS: Fresh YTD High
- RES 4: 0.7599 High Jul 6 2021
- RES 3: 0.7556 High Oct 28 and a key resistance
- RES 2: 0.7537 High Mar 25
- RES 1: 0.7533 2.0% 10-dma envelope
- PRICE: 0.7506 @ 16:33 GMT Mar 25
- SUP 1: 0.7450/7376 Low Mar 23 / Low Mar 22
- SUP 2: 0.7343 20-day EMA
- SUP 3: 0.7271 50-day EMA
- SUP 4: 0.7165 Low Mar 15 and a key support
AUDUSD strengthened further early Friday and continues to deliver new YTD and multi-month highs. This week’s important technical break has been the move above 0.7441, the Mar 7 high, marking an extension of the strong reversal from 0.7165, Mar 15 low. This reinforces the current bull cycle that started Jan 28. The break of 0.7441 signals scope for a climb towards 0.7556, the Oct 28 high. Initial firm support is seen at 0.7376.
