Hang Seng Index, HSI, China, CCP, US Dollar, Oil, Gold – Discussion Points
- The Hang Seng Index reacted to the possibility of more initiative
- Broader Chinese markets also rebounded on expectations of a business-friendly outlook
- If the Fed is less hawkish tomorrow, will it lift the Hong Kong HSI further?
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The Hang Seng Index (HSI) roared more than 4% higher today after falling nearly 2% on Monday.
The rally comes after a weekend meeting of the Politburo. The details, which only emerged late yesterday, lifted American depositary receipts (ADRs) listed on the Chinese exchange at the New York session.
The main aim of the symposium of the Central Committee of the Communist Party of China is that there has been a recognition that more needs to be done to strengthen the economy.
However, there are no concrete details on exactly what type of stimulus measures will be taken at this stage.
However, all bourses in mainland China and Hong Kong were buoyed by the prospect, led by the Hang Seng China Enterprises Index, which posted gains of over 5% on Tuesday.
Other APAC stock indexes were mixed with smaller moves ahead of tomorrow Federal Free Market Committee (FOMC) meeting.
Treasury yields were mostly unchanged, although the yield on the two-year note fell below 4.85% after trading at 4.92% yesterday.
The American dollar is slightly weaker overall, while Australian dollar was the best performing currency, boosted by news from China.
EUR/USD has stabilized after falling yesterday following weak PMI data in Europe compared to the US.
Oil held steady for one-day gains with the WTI futures contract nearing $79 a barrel, while the Brent contract is around $83. Point gold oscillates around $1,960 at press time
Looking ahead, after the German IFO business survey, the US will see the results of the Conference Board household consumer confidence survey.
You can view the entire economic calendar here.
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HANG SENG INDEX TECHNICAL ANALYSIS
Hong Kong’s Hang Seng Index (HSI) posted big gains today, but the overall picture is that the trading environment is tightening.
Resistance could be near 100 and 260 days simple moving averages (SMA) currently in the 19390 – 19570 area, just before the recent high near 19600.
On the other hand, previous lows of 18545, 18295 and 17948 may provide support.
— Written by Daniel McCarthy, Strategist for DailyFX.com
Please contact Daniel via @DanMcCarthyFX on Twitter
