EQUITIES
Shares in Asia-Pacific were higher on Friday trade. The Hang Seng index in Hong Kong led the gains regionally by climbing 1.14%. The Shanghai composite jumped 0.79% while the Japan’s Nikkei 225 added 0.71%. South Korea’s KOSPI advanced 0.56%, S&P/ASX 200 in Australia gained 0.36%, and the Singapore’s Straits Times index rose 0.10%. The S&P BSE Sensex in India saw muted moves, little changed in the mid-morning trade.
The gains today came as the Nasdaq and the S&P 500 indexes closed at record highs overnight on Wall Street, with the Dow also jumping almost 1%. The Dow Jones Industrial Average rose 0.95% to end at 34,196.82 points, while the S&P 500 gained 0.58% to 4,266.49, and the Nasdaq Composite climbed 0.69% to 14,369.71.
OIL
Oil prices climbed to near 3-year highs, supported by drawdowns in U.S. crude stockpiles and accelerating German economic activity, with the Brent now traded at $75.67 per barrel, and U.S. crude futures traded at $73.40 per barrel.
Overnight, the Brent closed at $75.56, while WTI ended at $73.30 per barrel.
CURRENCIES
Benchmark 10-year U.S. Treasuries, which saw yields dip after Biden's announcement of an infrastructure bill were last at 1.499%, up from a close of 1.487% on Thursday.
The dollar index was little changed against a basket of currencies at 91.779, holding below a 2-month high of 92.408 touched last week as investors continued to mull over the likelihood of Fed tightening in the face of persistent inflation.
Bitcoin was steady at $34,700, although headed for a small weekly loss, as it has recovered most of a plunge below $30,000 following the China's sweeping ban on cryptocurrency mining. Elsewhere, Bitcoin is set to become legal tender in El Salvador on Sept 7.
GOLD
Gold prices held steady on Friday as investors awaited U.S. inflation data of PCE prices due later in the day after mixed signals from Fed officials this week on interest rate hikes.
The spot gold little changed at $1,775.60 an ounce and at $1,776.00 per ounce for gold futures. Previously closed at $1,774.50 and $1,776.70, respectively.
Silver was steady at $26.06 per ounce, palladium added 0.36% to $2,653.50. Platinum climbed 0.2% to $1,098.40.
ECONOMIC OUTLOOK
Asian shares rose on Friday, tracking gains on Wall Street overnight that lifted the Nasdaq and the S&P 500 indexes to record highs after U.S. President Joe Biden embraced a bipartisan Senate infrastructure deal. Stocks rebounded after falling earlier in the week amid concerns of earlier-than-expected policy tightening by the U.S. Federal Reserve, after it signalled higher rates in 2023 last week.
The news of U.S. President Biden’s infrastructure spending plans worth $579 billion is likely to take centre stage today at 11:45 a.m. ET.
The U.S. initial jobless claims stayed steady compared to last week, as it fell 7,000 to 411,000 for the week ended June 19, the Labor Department said. While the continuing claims dropped by 144,000 to 3.390 million in the week ending June 12. Its economy grows at a 6.4% annualized rate in the Q1.
Investors focus now shifts to U.S. producer price data on Friday for further clues on rising inflation.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 111.215 and 111.405.
- Support line of 110.602 and 110.413.
Commentary/ Reason:
The Japanese yen traded at 110.785 per dollar, still weaker than levels below 110.4 seen against the greenback earlier in the trading week.
The dollar vaulted to its highest since March 2020 on the yen after the U.S. Federal Reserve surprised markets by projecting interest rate rises sooner than expected in 2023.
Although the remarks from Fed chair Jerome Powell seems to have calmed nerves in bond and stock markets about hikes any time soon, the dollar has held its gains and traders are wary of further rises if inflation is hotter than forecast.
The yen recovered slightly following comments from BOJ Governor Kuroda, who said, “Japan’s economy is picking up as a trend,” and the BOJ will keep up its measures to boost corporate lending. The yen also found support on Thursday’s news that Japan’s May PPI services prices rose at the fastest pace in 8 months.
