Originally published by AxiTrader
US stock markets offer Asia a negative lead in trade today after the big three US indexes all finished lower overnight.
The S&P 500 finished down 0.4% at 2565, the Dow Jones Industrial Average was 0.23% lower while the Nasdaq 100 dipped 0.7%. Earnings dominated the day's trade and will continue to do so with 200 companies reporting this week.
It suggests yesterday's rallies in many Asian stock markets may reverse a little today.
But just this week the IMF has again upgraded global growth expectations for 2017 and 2018 with EM and developing economies expected to lift from 4.3% in 2016 to 4.6% this year and 4.9% next.
Yet the reality is US stocks are the bellwether and the US dollar has been the dominant driver of Asian, and other, forex markets in recent months.
And on that note with the US dollar opened the week a little stronger, but nor universally so, against many currencies. The euro dipped as traders watch Catalonia and wonder about the European Central Bank this week. EUR/USD is at 1.1752.
The dollar was stronger against the yen as well trading up above 114 briefly yesterday before pulling back. It's at 113.42 this morning. Similarly, USD/SGD tested again this area around this multi-month downtrend in USD/SGD but the dollar has yet to be able to conclusively break it.
By some measures, the USD/SGD is climbing out of this downtrend. It depends where you draw it exactly. Short term a break of 1.3540/45 would signal a move higher with a move above 1.3685/90 need to confirm a move to 1.3804 Fibonacci resistance.
If USD/SGD breaks higher it would be a fair bet EUR/USD had broken down and the next leg of the US dollar's recovery was underway.
On the data front today:
- The "Flash" Nikkei manufacturing PMI for Japan is out today. After printing 52.9 last month expectations are for a print of 53.1
- The Malaysian leading and coincident indicators of economic growth are out. Last month's prints were 0.9% and 0.2% respectively.
You can read my full report of all the overnight moves on global markets and what they mean here in my Daily Market Musings
Have a great day's trading.