EQUITIES
Shares in Asia-Pacific were traded mixed on Wednesday. The Australia’s S&P/ASX 200 led gains in the region on better-than-expected GDP data, to jump 0.91% higher. The Nikkei 225 in Japan added 0.50%, and the South Korea’s KOSPI stays above the flatline.
Elsewhere, the mainland Chinese stocks, the Shanghai composite edged 0.65% lower, while the Hong Kong’s Hang Seng index slipped around 0.63%. The Singapore’s FTSE Straits Times Index declined 0.90%, and the India’s S&P BSE Sensex index dipped 0.60%.
Overnight on Wall Street, the Dow Jones Industrial Average rose 0.13%, to 34,575.31. Meanwhile the S&P 500 lost 0.05%, at 4,202.04, and the Nasdaq Composite dropped 0.09%, to 13,736.48.
OIL
Oil holds overnight gains to more than 2-year peak, despite OPEC+ additional output decision and as Iran nuclear deal still up in the air.
The Brent stays above $70, to trade at $70.44 per barrel, and U.S. crude futures traded at $67.87 per barrel.
Overnight, the Brent closed at $70.25 while WTI ended at $67.72 per barrel.
CURRENCIES
The dollar was steady, edging back from near a 5-month trough versus major peers, as a pick-up in U.S. manufacturing kept bets alive for a quicker normalisation of Fed policy. The index was at 89.897 on Wednesday after dipping and approaching the lowest since Jan. 7 at 89.533 on Tuesday.
The U.S. 10-year Treasury yield rose to a more than 1-week high overnight, now holds at 1.616.
The Turkey lira fell to another record low against the greenback after President Recep Tayyip Erdogan renewed calls for lower interest rates. Offshore yuan was little changed amid a push by the People’s Bank of China to temper its appreciation.
GOLD
Gold prices retreated below the $1,900-level marked in the previous session, as an uptick in bond yields weighed on the safe-haven metal while strong U.S. economic data prompted the shift back into riskier assets.
The spot gold declined to trade at $1,897.10 an ounce and slipped to $1,899.30 per ounce for gold futures. Previously closed at $1,899.50 and $1,905.00, respectively.
Palladium fell 0.36% to $2,8553.00 per ounce, silver edged 0.77% lower to $27.885, and platinum was steady at $1,191.10.
ECONOMIC OUTLOOK
Asian shares traded mixed on Wednesday as the tussle between economic optimism and inflation concern continues to play out in markets.
Global stocks are looking for fresh catalysts as they hover at record highs. Concerns linger that the recovery from the pandemic will stoke inflation and prompt central banks to pare back policy support earlier than anticipated.
A higher U.S. manufacturing activity in May cheered investors looking for signs of a continued rebound in the country. The ISM manufacturing activity rose as pent-up demand boosted orders in a reopening economy, even as unfinished work piled up because of shortages of raw materials and labour.
Eurozone inflation gauge surged past the ECB’s elusive target in May.
Australia’s economy showing higher-than-expected growth for the Q1, rose 1.8% in the March quarter, topping forecasts of a 1.5% increase.
OPEC+ provided an upbeat assessment of the demand outlook as the alliance ratified an output boost of 841,000 bpd for July and returning 700,000 bpd in June. The prospect of a speedy return of Iranian barrels to the market waned after an indication that talks to revive a 2015 nuclear accord with Iran has been delayed.
Among key events to watch today including the talks by several Fed policymakers, Fed’s Beige Book, and BoE consumer credit.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 109.752 and 109.908.
- Support line of 109.247 and 109.090.
Commentary/ Reason:
The dollar rose 0.15% against the yen to 109.631, to overturn previous three-day consecutive decline.
The greenback got it boost against the local note on positive data from the ISM Manufacturing PMI for the U.S., and rally in the stock markets.
An uptick in T-note yields also sparked some strength into the dollar.
Meanwhile, the yen was weighted as Japan last week extended its social restriction measures to later this month, though signs of pickup in vaccination fuelling their bets on economic reopening.
- USD/JPY price action remains rangebound, as a series of small bodied candles reflect a lack of activity from both buyers and sellers.
