TSX 60, Bovespa, and ASX 200 Forecasts – Global Indices Mixed Early on Tuesday

TSX 60 Technical Analysis

The TSX 60 in Toronto is in the midst of consolidation just above the 2000 level, as we are seeing quite a bit of noise at the moment, mainly due to the sensitivity that the market has going into the interest rate decision tomorrow. There is probably more of a steady as she goes behavior. They expect the Bank of Canada to hold rates at 2.25%, but the higher for longer sentiment has been heavily reinforced by Friday’s massive Canadian jobs report. They added 88,000 jobs in May, which was a 17-month high, which spiked bond yields in Canada and did spook equities a bit. I think we’ve got some sideways action ahead of us.

Bovespa Technical Analysis

The Bovespa in Brazil has been under pretty significant pressure over the last couple of weeks, as we have recently found ourselves testing the 200-day EMA. Global inflationary pressures, think oil, combined with worsening inflation projections in the latest Focus Bulletin out of Brazil have virtually erased market hopes for a near-term rate cut. The market is now heavily pricing in a maintenance of the rate at a restrictive 14.5%. Good for the real, bad for the markets.

The situation now is going to be very interesting for technical traders. I think this is an area where value hunters start to think about the Bovespa in Brazil, but clearly, at this point in time, there’s no momentum.

ASX 200 Technical Analysis

Australia has jumped straight up in the air during the trading session on Tuesday, but keep in mind that Monday was a public holiday, so there might be a little bit of catch-up. There is a little bit of spillover from the US payrolls, that helped markets maybe start to drift a little lower at the beginning but then turned around and rallied. Materials continue to be a drag at times, but it does look like we are trying to get back to the 50-day EMA right around the 8700 level.

The bright spot is the consumer discretionary sector, as soft domestic data has traders out there thinking that the Reserve Bank of Australia could cut next, and that, of course, would supply a little bit of support for some of the bigger retailers like Woolworths in Australia. If we can get above the 200-day EMA, the ASX 200 may start to take off again.