Dow Jones Falls as Viral Resurgence in Europe Threatens Restoration, Cling Seng Eye Losses whereas ASX 200 Good points

DOW JONES, HANG SENG, ASX 200 INDEX OUTLOOK:

• Dow Jones, S&P 500 and Nasdaq 100 fell -0.94%, -0.76% and -0.53% respectively
• Widened lockdown measures in Germany, France and Italy dampened restoration outlook, sending crude oil costs down greater than 6%
• Asia-Pacific shares look set to observe a bitter US lead decrease whereas demand for security is surging

Viral Resurgence, Powell & Yellen Testimony, USD, Crude Oil, Asia-Pacific at Open:

Issues surrounding Europe’s stalled vaccine progress and renewed spherical of lockdown measures launched in Germany, France and Italy despatched Wall Road equities broadly decrease. The area’s restoration prospects are dampened by a possible third wave, weighing on danger sentiment. In the meantime, Brazil reported over 3,000 Covid deaths for the primary time and the nation’s day by day new instances surged to a report excessive of 49ok. Buyers are on the lookout for safe-havens to shelter, sending the DXY US Greenback index and Treasury costs increased. Progress issues and souring sentiment put Asia-Pacific markets liable to one other pullback following Tuesday’s losses.

Fed Chair Jerome Powell and Treasury Secretary Janet Yellen testified earlier than the Home Monetary Companies Committee, reassuring markets that accommodative financial insurance policies are right here to remain and that inflation dangers are manageable. “We’d see some upward strain on costs. Our greatest view is that the impact on inflation will probably be neither significantly giant nor persistent,” Mr Powell mentioned when addressing the potential affect of the $1.9 trillion stimulus package deal on inflation. Yellen defended President Biden’s stimulus plans, hinting that the spending will probably be partially funded by company tax hikes.

Every day New Covid-19 Circumstances in Germany

Supply: JHU CSSE Covid-19 Information

The power and oil & gasoline sectors could be significantly susceptible to a pullback in Asia-Pacific as crude oil costs tumbled greater than 6% after Germany introduced an intensified coronavirus lockdown going into Easter. Chancellor Angela Merkel warned that new mutations raised the prospect for a probably lethal “third wave” as Europe struggled in its vaccine marketing campaign. This got here after a number of international locations halted using AstraZeneca’s Covid vaccine on account of issues about potential negative effects.

In the meantime, haven demand fueled a rally within the DXY US Greenback index, which climbed to a two-week excessive of 92.40 and exerted downward strain on commodity costs. The commodity-linked Australian and Canadian Greenback in addition to the Norwegian Krone suffered huge losses in a single day and should proceed to slip towards the Dollar.

WTI Crude Oil – Every day Chart

Chart by TradingView

Australia’s ASX 200 index exhibited resilience towards exterior headwinds, opening modestly increased. Actual property (+0.92%), shopper staples (+0.59%) and communication providers (+0.46%) had been among the many greatest performers, whereas power (-1.50%) and supplies (-0.67%) trialed behind.

Hong Kong’s Cling Seng Index appears to be like set to open decrease after falling 1.34% on Tuesday. The index suffered a major selloff since February as mainland inventory markets retreated broadly. The latest rise in longer-term Treasury yields additionally inspired profit-taking exercise within the expertise sector. The inventory connections noticed HK$ 4.Four billion web outflow by way of the southbound commerce, suggesting that mainland traders had been pulling their capital away from the HK inventory market.

Wanting forward, the UK core inflation fee headline the financial docket alongside US sturdy items orders and Markit manufacturing PMI readings. Apart from, a slew of Markit manufacturing and repair PMI readings from European international locations will even be watched for clues concerning the area’s restoration momentum. Discover out extra from theDailyFX calendar.

Wanting again to Tuesday’s shut, eight out of 9 Dow Jones sectors ended decrease, with 73.3% of the index’s constituents closing within the crimson. Supplies (-4.35%), industrials (-2.55%) and financials (-1.74%) had been among the many worst performers, whereas defensive-linked shopper staples (+0.90%) registered a small achieve.

Dow Jones Sector Efficiency 23-03-2021

Supply: Bloomberg, DailyFX

Advisable by Margaret Yang, CFA

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Dow Jones Index Technical Evaluation

The Dow Jones index reverted again to the “Ascending Channel” after briefly breaching it. The 20-day SMA line could function a right away assist, breaking it might result in a deeper pullback in direction of 31,916- the 76.4% Fibonacci extension. The general development stays bullish-biased, as instructed by the upward-sloped shifting averages.

Dow Jones Index – Every day Chart

Chart by TradingView

Cling Seng Index Technical Evaluation:

The Cling Seng Index is trending decrease inside a “Descending Channel”, underscoring a predominate bearish development within the close to time period. The index is testing the 100-day SMA line for assist, breaking which might possible intensify near-term promoting strain and expose the subsequent assist degree of 27,930. The MACD indicator is trending decrease beneath the impartial midpoint, suggesting that near-term momentum stays downward-biased.

Cling Seng Index – Every day Chart

ASX 200 Index Technical Evaluation:

The ASX 200 index bounced off the ground of the “Ascending Channel” and surged above the 50-day SMA line of 6,730 – a right away resistance. The index seems to have entered a range-bound situation between 6,660 and 6,860 since early March, ready for contemporary catalyst for a clearer path. The MACD indicator is trending under the impartial midpoint, displaying that downward momentum is prevailing.

ASX 200 Index – Every day Chart

— Written by Margaret Yang, Strategist for DailyFX.com

To contact Margaret, use the Feedback part under or @margaretyjy on Twitter