EQUITIES

Shares in Asia-Pacific were mostly higher on Thursday. The Nikkei 225 in Japan pared losses and rose 0.64%. Australia’s S&P/ASX 200 gained 0.41%, the Hang Seng index in Hong Kong advanced 0.24%, and the South Korea’s KOSPI was just above the flatline. Mainland Shanghai Composite rose 0.31%.

Singapore’s Straits Times index bucked the trend by falling 0.83%, after the county’s GDP missed expectations and the central bank tightened monetary policy.

Overnight in the U.S., stocks declined. The Dow Jones Industrial Average fell 0.67%, to 30,772.79, the S&P 500 slid 0.45%, at 3,801.78 and the Nasdaq Composite dropped 0.15% to close at 11,247.58.

OIL

Oil prices rose on Thursday, as investors weighed tight supplies against the prospect of a large U.S. rate hike that would stem inflation and curb crude demand.

Brent crude breaking above $100 a barrel, climbed 0.32%, to $100.17 a barrel. U.S. WTI was at $96.75 a barrel, up 43 cents after rising 46 cents in the previous session.

U.S. President Joe Biden will fly to Saudi Arabia on Friday, where he will attend a summit of Gulf allies and call for those allies to pump more oil. Though doubt exists as to how much extra Saudi Arabia can bring into the market quickly, with spare capacity at the OPEC is running low with most of the producers pumping at maximum capacity.

Data from the U.S. Energy Information Administration on Wednesday also point to slackening demand with product supplied slumping to 18.7 million bpd, its lowest since June 2021. Crude inventories rose, bolstered by another big release from strategic reserves.

CURRENCIES

The dollar resumed its relentless rise, driven by expectations for faster Fed policy tightening and safe haven flows amid growing fears of a recession. The dollar index hit a 20-year high on Wednesday and was last at 108.380 on Thursday.

The U.S. benchmark 10-year yield was 2.952%. U.S. two-year yields, which reflect interest rate expectations, were last at 3.121%, just off an overnight four-week high, increasing their lead on U.S. benchmark 10-year yields.

Singapore's central bank tightened its monetary policy, , in an off-cycle move hoping to slow inflation, sending the local currency up 0.7% to S$1.3963 per dollar, with economists expecting further tightening in October.

The tightening was the Monetary Authority of Singapore's fourth in the past nine months and comes hot on the heels of Canada's surprise 100-bps interest rate hike on Wednesday and just before an out-of-cycle 75-bps hike in the Philippines on Thursday. New Zealand and South Korea both delivered half percentage point rate hikes on Wednesday.

Leading cryptocurrency bitcoin rose 3% to $20,066. Second-largest Ether jumped 5% to $1,105.

GOLD

Gold faced heavy selling pressure, hurt by fears the U.S. Fed could go for a more aggressive interest rate hike this month to fight skyrocketing inflation.

The spot price was down 0.5% at $1727.40 an ounce. U.S. gold futures dropped 0.44% to $1,727.80.

Spot silver fell 0.3% to $19.11 per ounce, platinum slipped 0.7% to $849, and palladium firmed 0.2% to $1,978.20.

ECONOMIC OUTLOOK

Asian shares opened lower but turned mixed thereafter on Thursday as bargain-hunting activities emerged, despite negative cues from the global equity market.

Investors digested a report showing U.S. annual consumer prices jumped 9.1% in June versus the forecast of 8.8%. - the largest increase in more than four decades - leaving Americans to dig deeper to pay for gasoline, food, healthcare, and rent. Stripping away volatile food and energy prices, which have abated since the report's survey period, core CPI cooled down to an annual rate of 5.9%.

The report raised odds that the Federal Reserve will raise interest rates even more than the 75 basis points previously expected. Traders of futures tied to the Fed funds target rate have now priced in the probability of a larger, 100 basis point hike when it meets on July 26-27.

Worries of COVID-19 curbs in multiple Chinese cities to rein in new cases of a highly infectious subvariant has also kept a lid on prices.

The second-quarter earnings season will hit full stride on Thursday, when JPMorgan Chase & Co and Morgan Stanley are due to post results, followed by Citigroup and Wells Fargo & Co on Friday.