EQUITIES
Asia-Pacific markets traded higher on Tuesday. Japan’s Nikkei 225 led the gain with 2.81% higher, followed by the Australia’s S&P/ASX 200 that advanced 1.42%. Next, the Hong Kong’s Hang Seng index gained 0.05%, Singapore’s Straits Times index climbed 0.86%, and South Korea’s KOSPI up 0.81%. Meanwhile, the Shanghai composite retreated marginally at -0.05%.
Overnight on Wall Street, the Dow Jones Industrial Average rose 327.79 points, or 1.12%, to 29,591.27, the S&P 500 gained 20.05 points, or 0.56%, to 3,577.59 and the Nasdaq Composite added 25.66 points, or 0.22%, to 11,880.63.
OIL
Oil prices extended their gains to near 3-month highs as more vaccine news gave investors hope economic activity could resume globally. Brent crude futures traded to $46.47 a barrel, while U.S. crude at $43.49.
On Monday, Brent closed at $46.06 per barrel, while WTI futures ended at $43.06 per barrel.
CURRENCIES
The U.S. dollar index touched its lowest since Sept. 1 on Monday before edging higher, despite the dovish Yellen news, as it still flirted near 12-week lows. The dollar’s index recovered a touch to 92.47 after dropping to 92.013 overnight.
The offshore yuan was at 6.5817 per dollar. The Australian dollar ticked up 0.22% to $0.7662 while the New Zealand dollar also edged 0.10% higher to test a 2-year high of $0.6967 hit on Monday. The Mexican peso lost 0.16% versus the U.S. dollar at 20.18, after touched 19.9488 per dollar earlier.
GOLD
Gold fell to its lowest in four months as optimism over vaccine progress drove investors towards riskier assets. Currently trading at $1,823.50 per ounce, while stands around $1,822.00 per ounce for gold futures. Previously closed at $1,837.80 and $1,837.80, respectively.
Silver trading at $23.40, platinum trading at $928.00 and palladium trading at $2,2050.00.
ECONOMIC OUTLOOK
Asian stocks looked poised to open mostly higher on Tuesday as investors bet on a return to normal economic activity amid vaccine progress. U.S. President-elect Joe Biden also had received the go-ahead to begin his presidential transition. The dollar strengthened and Treasury yields rose. Hopes of more monetary stimulus however were dampened after Treasury Secretary Steven Mnuchin last week pulled the plug on some of the Fed's pandemic emergency lending programs.
Stocks also got an extra boost after reports that Biden plans to nominate former Federal Reserve Chair, Janet Yellen, to become the next Treasury Secretary, touting her experience at the central bank as critical to helping the country weather coronavirus-fuelled economic struggles.
Brent crude prices hit their highest levels since March as news of a third promising vaccine candidate spurred hopes of a quick recovery in oil demand.
To date, number of confirmed worldwide cases for COVID-19 pandemic has surpassed 59.128 million affecting 213 countries and territories around the world and 2 international conveyances, recording more than 1.395 million fatality globally.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 104.894 and 105.286.
- Support line of 103.623 and 103.230.
Commentary/ Reason:
- The dollar traded at 104.53 per dollar after climbing 0.9%. The greenback touched a more than 2-week high earlier today.
- USD/JPY recovered from last week losses and posted gains after stocks rallied on COVID-19 vaccine optimism, which reduced the safe-haven demand for the yen.
- Yen also on slippery ground as President Biden transition news boost risk appetite, apart from rising optimism following news of Federal Reserve Chair Janet Yellen to be nominated as U.S. Treasury Secretary.
- Meanwhile, the Bank of Japan is estimated to spend up to 50 billion yen ($478 million) under a new scheme aimed at incentivising regional banks to consolidate, a senior central bank official said on Tuesday.
