EQUITIES
Asia-Pacific stocks slipped in Thursday afternoon trade. The broader Hang Seng index in Hong Kong dropped 2%, leading the region’s losses, followed by the Australia’s S&P/ASX 200 at 1.9% lower and the South Korea’s KOSPI at 1.44% lower. The Nikkei 225 in Japan dipped 0.66% while the Shanghai composite in mainland China lost 0.14%.
Elsewhere, the Singapore’s Straits Times index was rose by 0.19%.
Wall Street sank and European stocks suffered their worst 1-day rout in three weeks on Wednesday. The Dow Jones Industrial Average fell 0.2% to end at 35,029.19 points. The S&P 500 lost 0.13% to 4,514, and the Nasdaq Composite dropped 0.57% to 15,286.68.
European stocks are expected to open lower today as investors in the region watch for announcements from the ECB.
OIL
Oil prices steadied on Thursday, recovering from earlier losses as a decline in U.S. Gulf of Mexico output following damages from Hurricane Ida offered some support.
The Brent now traded at $72.68 per barrel, while U.S. crude futures traded at $69.30 per barrel. Overnight, the Brent settled at $72.60 a barrel, and the WTI ends at $69.30 per barrel.
CURRENCIES
The dollar index remained flat at 92.741, after three consecutive days of rises, buoyed by cautious risk sentiment.
Benchmark 10-year Treasury notes yielded 1.336%, little changed, having edged lower on Wednesday after a strong demand for the monthly 10-year note auction.
GOLD
Gold prices held near 2-week lows on Thursday, pressured by a stronger U.S. dollar, while investors awaited a policy decision by the ECB due later in the day.
Spot gold was unchanged at $1,787.20 per ounce, steadied after touching its lowest level since Aug. 26 at $1,781.30 in the previous session. The U.S. gold futures eased 0.26% to $1,788.80.
Platinum and silver dropped 0.65% each to $969.80 per ounce and $23.900 per ounce. Palladium eased to $2,237.00. The price fell to their lowest level since Feb. 2 at $2,213.95 on Wednesday.
ECONOMIC OUTLOOK
Asian shares dropped Thursday, while the dollar held firm, in line with a cautious global mood as investors worried about the combination of slowing global growth and the potential tapering of central bank stimulus, also tracking the downbeat overnight performance of the U.S. and European stock markets.
The Delta coronavirus variant fast spreading infection spooked the market that could blunt the economy's recovery and on uncertainty about when the Federal Reserve may pull back its accommodative policies. A rally that took global stocks to records has cooled as investors await more indications that economic reopening can eventually overcome challenges posed by the delta variant.
Another concern is the prospect of a gradual reduction in monetary policy support, with the focus on the European Central Bank meeting later Thursday. Analysts expecting the ECB to announce a token step towards unwinding the pandemic-era emergency economic aid while still signalling copious support for years to come. ECB President Christine Lagarde holds a press conference after the bank’s rate decision.
Chinese gaming and media stocks tumbled on renewed concerns about Beijing’s regulatory crackdown after officials summoned gaming companies to ensure they implemented new rules for the sector.
API data showed that crude drawdown for the week ended Sept. 3 was smaller than expected, but gasoline and distillate drawdowns were bigger than expected. The U.S. gasoline stocks fell by 6.4 million barrels for the week ended Sept. 3, while crude stocks dropped by 2.9 million barrels.
Some other main moves in markets today include China PPI, CPI, new yuan loans, money supply, and aggregate financing, U.S. EIA crude oil production, and U.S. President Joe Biden decision whether to renominate Fed Chair Jerome Powell to a second term.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 110.467 and 110.596.
- Support line of 110.050 and 109.922.
Commentary/ Reason:
The dollar retreated from a 3-week high yesterday and posted modest losses against the Japanese yen on Thursday.
The yen added 010% at 110.134 yen to the dollar.
The Japanese Yen also gaining ground with USD/JPY heading back down as the pair tracks the U.S. yields lower.
Price action in the pair remains somewhat choppy having maintained the 110.467 current range. An upper bound exists at the 110.66 price line which has contained rallies since June.
On the downside, the next support target resides at 110.050 to 109.922.
