Asian equities are broadly lower following the weakness in US stocks overnight. Nikkei is down -0.8%, or 164pts at the time of writing while HK HSI is also down -0.8% or -222 pts. DJIA closed -0.46% or -82.91 pts at 17766.55 and turned negative for the year. Investors were gauging the chance of a September Fed rate hike. A New York Fed survey showed that one year inflation expectations rose to 3%, up from prior month's expectation of 2.7%. That's back to the highest level this year. Last week's strong job report solidified the case for a September hike and focus will turn to retail sales to be released on Thursday, on further evidence of a rebound of the economy in Q2. The dollar, however, didn't ride on the sentiment and weakened in general.
Also sentiments were weighed down by impasse in Greece after official from Greece and EU met without indication of progress. According to Greek government spokesman Gabriel Sakellaridis, the deal with international creditors "should be reached by June 30" when the current bailout program expires. On the other hand, ECB governing council member Christian Noyer urged that Greece has only "a matter of days" to reach the agreement and the situation was "extremely urgent". He also criticized that Greece hasn't submitted a convincing set of proposals. Meanwhile, he also noted that Greece "represents 2% of the Eurozone economy" and so "it's really marginal".
Released in Asian session, China CPI slowed more than expected to 1.2% yoy in May while PPI dropped -4.5% yoy, inline with consensus. From Japan, money stock M2 rose 4% in May. From Australia, NAB business confidence rose to 7 in May while home loans rose 1.0% in April. New Zealand manufacturing activity dropped -2.8% in Q1. Looking ahead, Swiss will release unemployment rate and CPI in Eurozone while UK will release trade balance. US will release wholesale inventories.
The technical development in DJIA is getting rather bearish. Firstly, bearish divergence condition was seen persistence since late 2014. Secondly, the medium term rise from 15855.12 is having a terminal triangle look. Such pattern could have indeed completed 18351.36. An immediate focus in on 17733.12 support. decisive break there will further raise the chance of "long term" trend reversal and would target key support level around 17037.76, 50% retracement of 15855.12 to 18351.36 at 17103.24 for a critical test. And in case of a firm break, DJIA could enter into a medium term down trend to correct the long term rise from 10404.49 and would target channel support now at around 16000.
