EQUITIES
Shares in Asia-Pacific traded mixed on Thursday. The Shanghai composite in mainland China rose 0.10% while the Hong Kong’s Hang Seng index edged 0.19% higher. Japan’s Nikkei 225 gained 0.34%, the S&P BSE Sensex in India rose 0.38%, and the Australia’s S&P/ASX 200 advanced 0.15%.
Elsewhere, the Singapore’s FTSE Straits Times Index slipped 0.17%, and the South Korea’s Kospi stood 0.07% lower.
Overnight on Wall Street, the Dow Jones Industrial Average fell 0.92%, to 34,792.67, the S&P 500 lost 0.46%, to 4,402.66. The Nasdaq Composite meanwhile added 0.13%, to 14,780.53.
OIL
Oil prices edged higher, supported by tensions in the Middle East, although failed to regain most of the previous day's losses, on exacerbating concerns of the spread of the Delta variant and the surprise build in crude stockpiles in the U.S., as the world's top oil consumer.
The Brent traded at $71.92 per barrel, and U.S. crude futures traded at $68.43 per barrel, advanced to regain a little ground after three days in a row of declines.
Overnight, the Brent settled at $70.38 a barrel, while the WTI ends at $68.15 per barrel.
CURRENCIES
A remark by Fed Vice Chair Richard Clarida of tightening talks was hawkish and helped U.S. yields and the dollar to firm, apparently shifting their focus away from the disappointing payroll report earlier of the day.
The dollar index held at 92.300, while the benchmark 10-year yield was last at 1.194% up from a close of 1.184%, having touched 1.127%, its lowest level since February.
Ether, the world's second-largest cryptocurrency, rose as much as 10% on Wednesday, and traded at around $2,713 on Thursday. The moves came ahead of a technical adjustment and software upgrade to its underlying Ethereum blockchain, which should happen later today.
Bitcoin increased as much as 3% to $39,460, resting in the vicinity of $40,000 where it has been for the last week.
GOLD
The firmer dollar and possibility of bringing forward policy tightening weighed a little on gold, with the spot price falling to $1,811.10 per ounce, while U.S. gold futures slipped to $1,813.80.
Silver fell 0.12% to $25.43 per ounce, having hit a near 3-week peak on Wednesday. Platinum earlier hit an over 7-month low of $1,005.50 and was last down 1.25% at $1,008.50. Palladium was flat at $2,651.50.
ECONOMIC OUTLOOK
Asian shares were muted on Thursday, amid mixed economic data and hawkish remarks from a Federal Reserve official that the central bank is on course to taper stimulus support. Uncertainty about Chinese policy once again under radar, after China’s state media once again took aim at industries.
Regional benchmark has walked back most of the ground lost a week earlier, when a series of Chinese regulatory crackdowns in sectors of property, technology, and education squeezed Chinese stocks and overshadowed the region.
Fed Vice Chair Richard Clarida signalled the possibility of bringing forward policy tightening, saying that the Fed is on track for a lift-off in interest rates could be met by the end of 2022, and suggested the central bank could start cutting back on asset purchase program later this year.
The ADP National Employment Report meanwhile showed U.S. private payrolls increased far less than expected in July. Employers added 330,000 jobs last month, fell short of forecasted increase of 695,000.
Focus is now turns to the U.S. non-farm payroll report, due on Friday.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 109.909 and 110.268.
- Support line of 108.691 and 108.314.
Commentary/ Reason:
A hawkish remark by Fed Vice Chair Richard Clarida of rates tightening helped pushed the dollar higher, apparently shifting their focus away from the disappointing payroll report earlier.
The dollar jumped 0.20% and bought 109.687 yen, bounced back after touching 3-month low of 108.339 earlier today.
The USD/JPY pair has begun to break from a trough of 108.69 support level which is the lower bound of a recent trading range, negating what had been a bearish break on the downside. The USD/JPY pair is still at risk of falling. The recovery needs to break the 109.90 resistance to turn bullish, with chances then to test the 110.28 area.
