EQUITIES
Shares in Asia-Pacific were higher on Friday trade. The Nikkei 225 in Japan led the gains in the region, jumping more than 2.2%, followed by the Australia’s S&P/ASX 200 that rose 1.20%. The Singapore’s FTSE Straits Times Index climbed 0.67%, the India’s S&P BSE Sensex index added 0.51%, and the South Korea’s KOSPI gained 0.83%.
Mainland Chinese markets also nudged higher as the Shanghai composite hovered above the flatline while the broader Hang Seng index in Hong Kong gained 0.61%.
Overnight on Wall Street, the Dow Jones Industrial Average rose 0.4% to close at 34,464.64. The S&P 500 edged 0.12% higher to 4,200.88 while the Nasdaq Composite ended the trading day stateside little changed at 13,736.28.
OIL
Oil prices pushed higher on Friday, supported by firm U.S. economic data and expectations of a strong rebound in global fuel demand in the Q3, while concerns about the impact of any return of Iranian supplies eased.
Both Brent and WTI are on track to post weekly gains of 5% to 6%.
The Brent crude futures traded at $69.64 per barrel, and U.S. crude futures traded at $67.18 per barrel.
Overnight, the Brent closed at $69.46 while WTI ended at $66.85 per barrel.
CURRENCIES
The benchmark Treasury yields was lifted back above 1.6% overnight. The 10-year note yielded 1.613% in Asia on Friday, from as low as 1.5520% mid-week.
The U.S. dollar hovered near a 1-week high versus major peers as traders looked to the upcoming inflation report for direction. The dollar index sat at 90.04 on Friday, after touching 90.179 the previous session for the first time since May 20.
Cryptocurrency bitcoin rose on Friday, though continued to trade below the $40,000 level.
GOLD
Gold prices edged lower on Friday, as strength in the dollar and U.S. Treasury yields weighed on the safe-haven metal, though still heads for fourth straight weekly gain.
The spot gold slipped to trade at $1,893.50 an ounce and down to $1,896.10 per ounce for gold futures. Previously closed at $1,895.90 and $1,898.50, respectively.
ECONOMIC OUTLOOK
Asian stocks put global equities on course for a seventh day of gains on Friday as investors bet the U.S. will lead the world out of the COVID-19 pandemic, on solid U.S. economic data and President Biden’s federal multi-trillion-dollar spending plan.
The Biden administration is reportedly set to unveil a budget that would take federal spending to US$6 trillion in the coming fiscal year.
Comments from Federal Reserve officials helped temper inflation fears that could spark a faster-than-expected reduction in stimulus. Treasury Secretary Janet Yellen said she sees the burst in prices as temporary, though likely to last through the end of 2021.
U.S. GDP increased at a 6.4% annualized rate last quarter. The unrevised estimated followed a 4.3% growth rate in the Q4. The U.S. labor market data also showed a stronger-than-expected data.
Some of the main moves in markets today including the U.S. personal income & spending, PCE prices, trade balance, and Eurozone economic sentiment & consumer confidence.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 110.147 and 110.500.
- Support line of 109.006 and 108.654.
Commentary/ Reason:
The dollar jumped to 109.847 yen, breaking out of its tight range over the past few weeks, to reach its highest levels in about seven weeks, as the yen held a decline amid month-end rebalancing.
Higher T-note yields undercut the yen and boosted USD/JPY. Also, a rally in U.S. stock indexes overnight and Nikkei 225 today curbed the safe-haven demand for the yen.
The dollar enjoyed a boost from higher U.S. bond yields after a New York Times report that President Joe Biden will announce on Friday a $6 trillion budget for 2022. The proposal came as the U.S. economic recovery appears to gain momentum.
The yen was hampered also by concerns about a delay in Japan’s economic recovery after media report that Japan is looking to extend a state of emergency in Tokyo and several other areas by three weeks to June 20.
The USD/JPY has found support and bulls are beginning to dominate price action. A clear, established rally has resumed after a period of consolidation.
