EQUITIES
Shares in Asia-Pacific were mixed on Thursday trade. In Hong Kong, the Hang Seng index edged 0.21% lower. The mainland Chinese market was also lower, with the Shanghai composite down 0.45%. The South Korea’s KOSPI declined 0.25% and in Australia, the S&P/ASX 200 hovered below the flatline, 0.05% lower.
Elsewhere, the Japan’s Nikkei 225 rose 0.50%, the Singapore’s FTSE Straits Times Index added 0.10% and the India’s S&P BSE Sensex index advanced 1.01%.
Overnight on Wall Street, the Dow Jones Industrial Average rose 0.55%, to 34,084.15, the S&P 500 gained 1.06%, to 4,159.12 and the Nasdaq Composite added 1.77%, to 13,535.74.
OIL
Oil prices edged up on Friday after three days of losses as investors braced for the return of Iranian crude supplies after officials said Iran and world powers made progress on talks to revive a 2015 nuclear deal.
However, both contracts are down nearly 5% for the week and on track to post their biggest weekly loss since March.
The Brent crude futures traded at $65.17 per barrel, and U.S. crude futures traded at $62.21 per barrel.
Overnight, the Brent closed at $65.11 while WTI ended at $62.05 per barrel.
CURRENCIES
The dollar was pinned near milestone lows against its rivals and is down about 0.6% for the week so far. The index, which measures the greenback against six major peers, was at 89.77, little changed after the previous session's 0.4% decline.
Benchmark 10-year Treasury yields held to 1.635%.
Cryptocurrencies bitcoin recovered to around $40,630 following a wild ride this week that saw it plunge as low as $30,066 on Wednesday for the first time since late January. Meanwhile, ether was trading around $2,761 following a drop to as low as $1,850 on Wednesday.
The digital token rebounded after prominent backers such as Ark Invest's Cathie Wood and Tesla's Elon Musk indicated their support.
GOLD
Gold priced eased, as optimism around a swift economic recovery lifted appeal for riskier assets, although the bullion is still on track for a third straight weekly rise.
The spot gold down to trade at $1,876.50 an ounce and slipped to $1,875.10 per ounce for gold futures. Previously closed at $1,876.60 and $1,881.90, respectively.
ECONOMIC OUTLOOK
Asian stocks mixed on Friday, as investors tempered fears about hot inflation and the prospects of an early tapering of stimulus by the Federal Reserve.
Tech stocks led gains as Treasury yields declined following a weaker-than-expected U.S. business activity reading. A decline in commodity prices, particularly oil, also undermined the thesis for too-hot inflation.
The number of Americans filing for new claims for unemployment benefits fell by 34,000 to 444,000 in the week ended May 15, down for the third straight time, suggesting job growth picked up this month, though companies still are desperate for workers. Continuing claims unexpectedly jumped to 111,000, the largest weekly increase since the end of November.
U.S. corporate earnings due today are Deere & Foot Locker.
Some key events to watch today including U.S existing home sales, Eurozone consumer confidence and UK retail sales, as well as PMI figures across Europe and U.S.
To date, number of confirmed worldwide cases for COVID-19 pandemic has surpassed 165.25 million, recording more than 3.42 million fatality globally.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 109.317 and 109.542.
- Support line of 108.592 and 108.368.
Commentary/ Reason:
Against the yen, the dollar was steady on Friday at 108.756, having dropped about 0.40% overnight, and set for about 0.5% lower for the week.
The 10-year T-note yield on Thursday fell to 1.630%, which weakened the dollar’s interest rate differentials.
While a lower yield was bearish for the dollar, concerns about increasing COVID-19 cases continue to weigh on Asian foreign exchange trading.
The USD/JPY appears to be stalling mid-rally as buying momentum begins to fade. The pair is moving closer to the ascending trendline which has represented a key support level. Momentum indicators have flattened in neutral/bullish territory.
