EQUITIES
Shares in Asia-Pacific were mixed in Tuesday trade, as data showed China’s August trade data came in above expectations. The Shanghai composite in mainland China rose 0.77% while the Hong Kong’s Hang Seng index gained 0.61%.
Japan’s Nikkei 225 index meanwhile touched a 5-month high, continuing to trek upward after two straight trading days of solid gains. Investor sentiment is buoyed by the prospect of more stimulus that has reportedly been called for by prime minister contender Fumio Kishida. The Nikkei 225 in Japan rose 0.88%
Elsewhere, South Korea’s KOSPI dipped 0.67%, the Singapore’s Straits Times index was down by 0.13%, and the S&P BSE Sensex in India slipped 0.31%. The S&P/ASX 200 in Australia shed 0.13%, ahead of the Reserve Bank of Australia rate decision announcement.
Overnight, European shares climbed to end near record levels, led by technology stocks. Although, trading volumes were thin throughout the day due to a public holiday in the U.S. Recent uncertainty over monetary policy and rising COVID-19 cases has pushed investors into technology stocks, which have been the best-performing sector through the pandemic.
OIL
Oil prices were wobbly as cautious mode still clouded investors’ sentiment after Saudi Arabia cut crude contract prices for Asia, coupled with the U.S. Fed’s upcoming announcement on its tapering of asset purchases.
The Brent now traded at $72.57 per barrel, while U.S. crude futures traded at $69.13 per barrel.
Overnight, the Brent settled at $72.22 a barrel, and the WTI ends at $69.16 per barrel.
CURRENCIES
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 92.197 — still off levels above 92.4 seen last week, while the 10-year U.S. Treasuries yielding 1.343%, up 2.1 basis points.
In cryptocurrencies, bitcoin topped $52,000, with El Salvador planning further purchases after buying 400 coins ahead of adopting the cryptocurrency as legal tender starting today. While ether traded little changed at $3,914 after topping $4,000 last week for the first time since mid-May.
GOLD
Gold prices were steady on Tuesday, supported by a softer dollar and prospects of the U.S. Fed delaying a tapering in its pandemic-era bond purchases, while the ECB’s meeting this week was also in focus.
Spot gold was steady at $1,820.40 per ounce, while U.S. gold futures fell 0.5% to $1,823.40.
Silver slipped 0.4% to $24.69 per ounce, platinum down 0.5% to $1,015.70 and palladium was flat at $2,407.00.
ECONOMIC OUTLOOK
Japan’s Nikkei 225 hit 30,000 for the first time since April, on optimism that a new prime minister will usher in favourable policies. China shares also climbed, aided by better-than-expected trade data, and continuing rebound in technology stocks. Other regional stocks declined as the Delta variant fast spreading infection still spooked the markets.
China's exports unexpectedly grew at a faster pace in August, as solid global demand offset some of the pressure on the world's second-biggest economy from a resurgence of domestic COVID-19 cases and supply bottlenecks. The exports jumped 25.6% year-over-year in August, customs data showed Tuesday — above expectations for a 17.1% rise.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 109.976 and 110.071.
- Support line of 109.669 and 109.575.
Commentary/ Reason:
The dollar was little moved at 109.809 yen. The note was continuing last week's trend, still meandering in the middle of its trading range of the past two months.
The price action suggests traders are still assessing the impact of Friday’s U.S. non-farm payrolls report on future Federal Reserve policy
While for the yen, traders are looking for clues for new monetary policies from the new PM candidates, after incumbent PM Suga announced that he will not be extending his premiership.
A sustained move over 109.97 will indicate the presence of buyers. This could lead to a laboured rally with potential upside targets coming in at 110.07 and upward, while a sustained move under 109.66 will signal the presence of sellers. The first downside target is a support cluster at 109.575, its supports line for several recent trading.
