EQUITIES
Shares in Asia-Pacific were mostly lower on Wednesday trade, except for the mainland Chinese stock and India stock that advanced. The Shanghai composite rose 0.40% while over in India, the S&P BSE Sensex index traded 0.30%. higher.
Elsewhere, the Nikkei 225 in Japan fell 0.33%, while the South Korea’s KOSPI dipped 0.34%. In Australia, the S&P/ASX 200 was down 0.22% lower. The Singapore’s FTSE Straits Times Index slipped 0.28%, and the Hong Kong Hang Seng index shed 0.07%.
Overnight on Wall Street, the Dow Jones Industrial Average fell 0.09%, to 34,599.82; the S&P 500 gained 0.02%, at 4,227.26; and the Nasdaq Composite added 0.31%, at 13,924.91.
In Europe, the pan FTSEurofirst 300 index added 0.08% to close at a new record high, while the STOXX 600 index rose 0.15% to also set a new closing high.
OIL
Oil resumed its rally for a second day as investors grow more confident that the recovery from the pandemic will help demand, while the prospect of a near-term return of Iranian oil supply faded as the U.S. secretary of state said sanctions against Tehran were unlikely to be lifted.
The Brent now traded at $72.64 per barrel, and U.S. crude futures traded at $70.48 per barrel.
Overnight, the Brent closed at $72.22 while WTI ended at $70.05 per barrel.
CURRENCIES
The benchmark 10-year Treasury yields fell to 1.513%, its lowest in more than a month, suggesting bond investors do not see a spike in inflation despite nagging jitters over the Fed’s insistence a likely jump in consumer prices will be transient.
It last stood at 1.533%. The dollar's index against a basket of six major currencies stood at 90.082, down 0.06%.
Bitcoin remains under pressure, trading at about $32,830 after a retreat to a 2-week low overnight. Ether stood at $2,429.
GOLD
Gold prices inched higher on Wednesday, helped by a fall in U.S. bond yields, though further boost halted ahead of U.S. inflation data and the ECB policy meeting this week.
The spot gold advanced to trade at $1,893.70 an ounce and added to $1,896.10 per ounce for gold futures. Previously closed at $1,892.50 and $1,894.50, respectively.
Silver was steady at $27.765 per ounce, palladium slipped to $2,805.00, while platinum edged 0.1% higher to $1,163.50.
ECONOMIC OUTLOOK
Asian stocks were mostly lower on Wednesday, as investors reacted to the release of Chinese inflation data, and U.S. equities treaded water near a record ahead of key inflation data.
China’s PPI for May jumped 9% from a year earlier, following a 6.8% gain in April. The country’s CPI rose 1.3%.
U.S. job openings from JOLTs survey rose in April to a fresh record high. The number of available positions climbed to 9.3 million during the month, the highest on data back to 2000.
The World Bank on Tuesday upgraded its growth forecast, with the global economy now expected to grow 5.6% in 2021. That compared against an earlier forecast in January for a 4% global economic expansion in 2021.
El Salvador is one step closer to be first nation in the world to give bitcoin legal tender after proposing new law. The Bitcoin Law, if passed, would allow prices to be shown in bitcoin, tax contributions to be paid with the digital currency, and exchanges in bitcoin will not be subject to capital gains tax.
The API reported crude stocks fell by 2.1 million barrels in the week ended June 4. Gasoline stockpiles up by 2.4 million barrels, while distillate inventories climbed by nearly 3.8 million barrels. Stockpile data from the U.S. EIA is due on Wednesday.
GameStop, the company most closely associated with the Reddit-driven short squeeze phenomenon, is expected to report quarterly results after markets close on Wednesday.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 109.642 and 109.794.
- Support line of 109.150 and 108.998.
Commentary/ Reason:
The pair was little change from opening today, to stand at 109.481 yen.
The tight trading ranges seen so far this month reflect the cautious mood in the market ahead of the inflation numbers. Investors were cautious ahead of the U.S. CPI report this week and the U.S. central bank's meeting next week.
Whilst the Fed reassures that this spike in inflation is temporary, policy makers will need to be out in their droves to calm the market.
Meanwhile, on Tuesday, the BoJ deputy governor Masayoshi Amamiya said the central bank will not hesitate to take additional monetary easing steps if needed, thus weighting on the country’s currency.
