The Hang Seng Index hit a 13-year low today, but temporarily fell when anonymous sources said China could certainly/might consider changing its Covid-19 quarantine requirements upon entry. The rumor was enough to lift some risk assets and drive the US dollar trading slightly lower before reversing and returning to where it was before the headline.
Hong Kong's relatively new chief John Lee's speech yesterday did little to evoke offshore confidence in the big city as a place to do business. Fed's James Bullard said at the November meeting he expected a rate hike of 75 basis points for him and a similar rate hike is imminent at the December conclave.
Board member Charles Evans, on the other hand, is hawkish to a lesser extent, saying the Fed is well positioned for different scenarios. US President Joe Biden has said energy producers should refrain from paying dividends or buying back their own shares. Instead, he said they should focus on increasing production.
Government bond yields rose a few basis points in the Asian session on top of a strong rise in North American trading. USD/JPY continues to push towards 150. The Bank of Japan has recommitted to unlimited purchases of 10-year government bonds (JGBs) to keep yields below 0.25%.
British Prime Minister Liz Truss spent the night blowing her trumpet trying to bring the Conservative Party into some order, but rumors spread about her term in office and her message seems to have gotten a little rusty.
The Sterling continues its flirtation with a move below 1.1200 after yesterday's blistering 10.1% y/y inflation through the end of September.
Australian employment data was slightly lacking, resulting in a weaker Australian dollar and a weaker kiwi. Going forward, the US will receive data on unemployment claims and home sales.
Today, the Hang Seng index breached below the low from the previous week as it extended beneath a support for a downward trend line. The 161.8% Fibonacci Extension level at 15414 may provide the next level of support.
The most recent peak at 17059 or the break points between 18040 and 18200 could serve as resistance on the topside.
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