Hang Seng Index Sinks to New Lows While the Fed Maintains Hawkishness

Hang Seng Index, Fed, US Dollar, GBP/USD, Crude Oil, AUD/USD – Talking Points

• The Hang Seng index stay susceptible regardless of rumours
• The Fed continues to speak powerful and Treasury yields are transferring north
• If China keep their powerful strategy to Covid-19 guidelines, will HSI go decrease?

The Hang Seng index hit its lowest stage in 13 years immediately, however it had a short reprieve when unidentified sources mentioned that China would positively/possibly take into account adjustments to Covid-19 quarantine necessities when getting into the nation.

The hearsay was sufficient to raise some threat property and see the US Dollar go a bit decrease earlier than reversing and going again to the place it was previous to the headline.

A speech yesterday by Hong Kong’s comparatively new chief John Lee did little to implore offshore confidence within the metropolis as a spot to do enterprise.

The Fed’s James Bullard indicated that 75 foundation factors at their November assembly appeared possible and {that a} related hike on the December conclave is on the playing cards.

Meanwhile, his fellow board member, Charles Evans was hawkish however to a lesser diploma when he mentioned that the Fed was nicely positioned for varied situations.

US President Joe Biden mentioned that power producing firms ought to chorus from paying dividends or shopping for again their very own shares. Instead, he mentioned that they need to give attention to growing manufacturing.

The WTI futures contract is close to US$ 87 bbl whereas the Brent contract is a contact above US$ 93 bbl on the time of going to print.

Treasury yields have added just a few foundation factors within the Asian session on high of enormous beneficial properties in North American commerce. USD/JPY continues to press towards 150.

The Bank of Japan re-committed to purchasing an infinite quantity of 10-year Japanese Government bonds (JGB) with a purpose to hold the yield at or under 0.25%.

Overnight, UK Prime Minister Liz Truss tried to sound the trumpet and coral her Conservatives into some type of order, however it seems that her messaging is considerably rusty as rumours flow into about her tenure.

Sterling continues to flirt with a transfer underneath 1.1200 within the aftermath yesterday’s purple scorching 10.1% y/y inflation learn to the tip of September.

Australian jobs data was a slight miss and the Aussie Dollar was decrease within the aftermath, dragging the Kiwi down with it.

Looking forward, the US will get information on jobless claims and residential gross sales.

The full financial calendar may be seen here.

HANG SENG INDEX TECHNICAL ANALYSIS

The Hang Seng index pierced under final week’s low immediately because it stretched under a descending development line assist. The subsequent stage of assist could possibly be on the 161.8% Fibonacci Extension stage at 15414.

On the topside, resistance could possibly be on the latest peak of 17059 or the break factors within the 18040 – 18200 space.

Chart created in TradingView

— Written by Daniel McCarthy, Strategist for DailyFX.com

Please contact Daniel by way of @DanMcCathyFX on Twitter