EQUITIES
Asia-Pacific markets were mostly higher on Wednesday. The Japan Nikkei 225 index led the gains, added 1.15%, followed by the South Korea’s KOSPI and the Singapore’s Straits Times index by 1.14% and 0.45%, respectively. The India’s S&P BSE Sensex Index rose 0.41%, and the Australia’s S&P/ASX advanced fractionally to 0.11%.
Meanwhile, the mainland Chinese stocks were lower, with the Shanghai composite slipped -0.20%. The Hong Kong’s Hang Seng index shed -0.03%.
Overnight on Wall Street, the Dow rose 0.19%, the S&P 500 gained 0.04% and the Nasdaq Composite added 0.28%.
OIL
Oil prices touched 1-year high Wednesday on tight supply and expectation of a drop in U.S. inventories. The Brent crude futures traded to $57.35 a barrel, while U.S. crude at $53.90.
Oil prices touched its highest in 11-month on Tuesday, before closed at $58.58 per barrel for Brent, while WTI futures ended at $53.21 per barrel.
CURRENCIES
The dollar suffered overnight losses and Treasury yields retreated from a 10-month high as traders mulled investor demand for bonds and the prospect of fiscal spending. The dollar index against a basket of its peers was at 89.98.
The Australian and New Zealand dollars rose from 1-week lows, to trade at $0.7227, and $0.77764, respectively. Chinese yuan held gains to begin the day at a 1-week high in offshore.
GOLD
Gold bouncing off a 1-month low touched on Monday, as focus returned to prospects of inflation driven by more U.S. fiscal stimulus under President-elect Joe Biden.
The safe haven trading at $1,860.10 an ounce, while added around $1,860.50 per ounce for gold futures. Previously closed at $1,855.00 and $1,844.20, respectively.
Silver trading at $25.50, platinum trading at $1,073.00 and palladium trading at $2,279.00.
ECONOMIC OUTLOOK
Asian stocks opened mostly higher on Wednesday, tracking overnight Wall Street gains as prospects of an eventual economic recovery against the coronavirus seems not farfetched, with the distribution of vaccine and on the President-elect Joe Biden’s pledge to detail more economic aid.
Investors eyes also focused on the U.S. earnings and U.S. President-elect Joe Biden's inauguration next week for more clarity on fiscal spending plans.
U.S. House set to push ahead to remove President Trump from office over his supporters' deadly Jan 6 assault on the U.S. Capitol. An impeachment trial could proceed, even after Trump leaves office.
Crude inventories in the U.S. dropped by 5.8 million barrels last week to around 484.5 million barrels, data from the API showed. EIA crude oil inventories report will be on Wednesday.
JPMorgan Chase & Co and UBS Group AG downgraded forecasts for euro area. The economy is poised to shrink again at the start of this year as the resurgent pandemic plunges the region into a double-dip recession.
To date, number of confirmed worldwide cases for COVID-19 pandemic has surpassed 91.577 million affecting 213 countries and territories around the world and 2 international conveyances, recording more than 1.962 million fatality globally.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 104.323 and 104.570.
- Support line of 103.526 and 103.280.
Commentary/ Reason:
- The dollar fell through 104 Japanese yen to trade at 103.635 yen on Wednesday, down 0.10% on the day.
- The yen strengthened after T-note yields fall from its recent 9-3/4 month high. The yen also found support on rising Japanese bond yields after the 10-year Japan JGB bond yield rose to a 2-month high Tuesday.
- Meanwhile on Wednesday, the Nikkei reported that BoJ will consider cutting its economic forecast for the current fiscal year ending in March as consumption takes a hit from state of emergency measures against the pandemic.
- On the negative side, the Japanese government is set to expand the state of emergency to more areas on Wednesday, on top of current regions, according to local media reports.
- While for the dollar, prospects of inflation driven by more U.S. fiscal stimulus under President-elect Joe Biden has make the greenback to be less attractive.
