Asian Markets Track the U.S. Higher

Asian markets started this week on a high note with gains as they tracked U.S. markets higher and good regional corporate news cheered investors. Last week the S&P 500 and the NASDAQ both ended with fresh record highs.

We might start to see some investor caution setting in as the U.S. Federal Reserve Board is about to begin its policy meeting this week. Most analysts and the markets are prepared and convinced the Fed will delay its tapering of its bond purchase program to sometime in 2014. Consensus is that they will begin in March.

STOCKS

The DJIA was up 61 points to close at 15,570.28. For the week the Dow gained 1.11 percent and is now within one percent of its all-time high. The S&P500 was up 7.70 points to end at 1,759.77. This is a fresh record high and was up 0.88 percent for the week. The Nasdaq Composite was up 14.40 points to 4,943.36. This is a new 13 year high and the composite was up 0.74 percent for the week.

The Nikkei 225 was up 1.68 percent as it is enjoying a strong rebound from its two and a half week low. Investors cheered a weakening yen which moved towards $98 against the U.S. Dollar.

The Australian benchmark was up one percent and above 5,420. It is at its highest level since 2008. The Shanghai Composite was down 0.2 percent as it is nearing a seven wee low. Investors are continuing profit taking. The Kospi in South Korea was also up today. However, gains were limited as a stronger won concerned investors. The won is now within a nine month high against the U.S. dollar and at 1,061 per Dollar.

CURRENCIES

The USD/JPY (97.602) was higher after comments made by the Governor of the Bank of Japan. He stated he is committed to monetary easing. We may be in a range trading pattern for an extended period here.

The EUR/USD (1.3804) is still moving higher, at least short term. We could face stiff resistance at 1.3850 and if it manages to break above that we have the key level of 1.4000. We could see profit taking soon. GBP/USD (1.6181) has fallen from 1.6250. We could be dipping back to 1.61 and then 1.6000. We expect to be in a range pattern for a bit now especially before the Fed’s policy meeting this week.

COMMODITIES

WTI Crude (97.63) is trading rather steady for now as we seem to be in an uptrend for 100.00. Brent Crude (107.14) is also moving higher and can test 108.00. Both have support at the current levels which appears to be holding.

Gold (1350.10) has been rising well the last couple of weeks but has strong resistance at this level. If it breaks we could see 1400. If it holds we will dip back to 1325.

TODAY’S OUTLOOK

Another credit crunch in China? The Chinese Central Bank pulled more cash from the system as it tightened liquidity. This is the third time in two weeks and is raising concerns that we could see another credit crunch.

We are fairly quiet on the economic data front for today. The U.S. will release pending home sales and Industrial production numbers later in the day.