EQUITIES
Shares in Asia-Pacific were mixed on midday Monday trade. The mainland Chinese stocks edged lower as the Shanghai composite declined 0.12%, the Hong Kong’s Hang Seng index fell 0.59%, and the Japan’s Nikkei shed 0.57%.
Elsewhere, the South Korea’s KOSPI climbed 0.42%, the Singapore’s Straits Times index added 0.25%, the S&P BSE Sensex in India rose 0.69%, and the Australia’s S&P/ASX 200 advanced 0.41%.
European markets head for cautious open as markets keep an eye on oil prices ahead of the OPEC+ meeting. The U.S. markets are closed on Monday for the Independence Day holiday.
OIL
Oil prices fell on Monday, as investors and traders awaited crucial talks by OPEC+ following disagreement within the group that could lead to major producers pumping up volumes to grab market share.
The Brent now traded at $76.04 per barrel, and U.S. crude futures traded at $75.09 per barrel.
On Friday, the Brent closed at $76.17, while WTI ended at $75.16 per barrel.
CURRENCIES
U.S. bond markets were closed for the holiday, after the benchmark 10-year U.S. Treasury yield sank to 1.431%.
The dollar was mostly flat on Monday after dropping from a 3-month high at the end of last week, pressured by the weaker details of the U.S. nonfarm payrolls report. The U.S. dollar index now at 92.312.
Cryptocurrencies were steady on Monday, with bitcoin at $34,184 and ether holding on to recent momentum to trade at $2,259.
GOLD
Gold prices holding its 2-week high from the previous session, as investors awaited more U.S. economic data for clues on the Fed’s monetary policy plans.
The spot gold is unchanged at $1,787.30 an ounce and rose to $1,787.40 per ounce for gold futures.
Silver rose 0.7% to $26.68 per ounce, palladium gained 0.04% to $2,793.50 and platinum added 1% to $1,098.50.
ECONOMIC OUTLOOK
Asian stocks gained on Monday, extending the rally that took global equities to a record high after a U.S. jobs report signalled the economic recovery remained intact but didn't yet warrant any immediate withdrawal of Federal Reserve stimulus.
Trading is set to be thinner than usual with U.S. markets closed for the extended 4th of July weekend.
A stronger-than-expected U.S. employment report is strengthening investors' focus on economic data and the Fed's next move, as markets cheer further evidence of a robust economic recovery amid worries over persistent inflation.
A private survey on China’s services sector activity in June showed growth slowing sharply in June to a 14-month low. The Caixin/Markit services PMI for June came in at 50.3.
Meanwhile Japan's services sector activity shrank for the 17th straight month in June. The final au Jibun Bank Japan Services PMI was at 48.0, up from the prior month's final level of 46.5 and a 47.2 flash reading.
OPEC+ talks dragged on. OPEC+ voted on Friday to raise output by some 2 million barrels per day from August to December 2021 and to extend remaining cuts to the end of 2022, but UAE objections prevented agreement and called for "compromise and rationality" to secure agreement when the group reconvenes on Monday.
Investors yes will be on the minutes of the FOMC meeting. The minutes from that June meeting are due to be published on Wednesday and might have more details on policymakers' thinking.
China’s Xi Jinping is expected to speak this week with Germany’s Angela Merkel and France’s Emmanuel Macron, as they attempt to keep human rights disputes from scuttling efforts at cooperation.
Europe investors meanwhile will keep an eye on final eurozone PMI data from the region for June on Monday, as well as French industrial output data for May and Turkish inflation figures for June. There are no major earnings releases due Monday.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 111.293 and 111.503.
- Support line of 110.873 and 110.663.
Commentary/ Reason:
The dollar clawed back slightly against the yen, rising 0.1% to 111.120 yen, after dropping just below 111 yen earlier following the jobs report.
Investors re-assessed short dollar positions following months of strong data and a hawkish shift in tone from the Fed.
Meanwhile earlier today, the Bank of Japan Governor Haruhiko Kuroda reiterated the central bank's readiness to ease monetary policy further if needed, with a close eye on the coronavirus pandemic's impact on the economy.
The accelerating COVID-19 infections in Tokyo renewed concerns about a potential surge triggered by the Olympics, which open July 23.
The yen also was undercut by a hawkish speech by Chinese President Xi in which he saber-rattled on the issue of Taiwan and fuelled geopolitical concerns for the region.
