EQUITIES
Asia-Pacific markets slipped Wednesday. Except for the Hong Kong’s Hang Seng index that was 0.65% higher, others retreated.
The South Korea’s KOSPI led the losses at -1.18% lower, while in Japan, the Nikkei 225 down -0.62%. Stocks in Australia also lower, with the S&P/ASX 200 down -0.42%. The India’s S&P BSE Sensex index slipped -0.55%, and the Singapore’s Straits Times index shed -0.46%.
Markets in mainland China remain closed on Wednesday for the Lunar New Year holidays.
Overnight on Wall Street, the S&P 500 closed 0.1% lower at 3,932.59 while the Nasdaq Composite declined 0.3% to end its trading day at 14,047.50. The Dow Jones Industrial Average edged 64.35 points higher to a record close of 31,522.75.
OIL
Oil prices eased as U.S. Treasury yields surged, although the fall limited by the deepening energy crisis in the U.S. The Brent crude futures traded to $63.42 a barrel, while U.S. crude at $60.03.
Overnight, the Brent close at $63.35, while WTI futures ended at $60.05 per barrel.
CURRENCIES
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 90.63 following a bounce from levels below 90.3.
The benchmark 10-year Treasury yield jumped a level not seen since February 2020. The yield on the 10-year Treasury last stood at 1.3006%. The 30-year rate also hit its highest level in a year. The rise in the yield came by increasing inflationary concerns amid a rise in energy prices along with the prospect of a big U.S. fiscal stimulus and the prospect of global economic recovery.
The Australian dollar changed hands at $0.7754 after seeing levels around $0.78 yesterday. The kiwi edged lower to $0.7203.
The offshore Chinese yuan also stepped back after hitting a 2-1/2-year high of 6.4010 per dollar and last stood at 6.4269.
Bitcoin broke through $50,000 mark for the first time before falling back to around $49,700, as traders bet on its further acceptance of cryptocurrencies among major companies.
GOLD
Gold edged lower to trade at $1,791.90 per ounce, while rose around $1,791.80 per ounce for gold futures. Previously closed at $1,793.50 and $1,798.00, respectively.
Silver trading at $27.31, platinum trading at $1,254.00 and palladium trading at $2,272.00.
ECONOMIC OUTLOOK
Stocks in Asia-Pacific slipped in Wednesday trade as global stocks pulled back overnight from a record as investors grew concerned over rising bond yields and its implications on the risk assets.
Japan’s exports rose 6.4% in January as compared with a year earlier.
Some key events coming up:
- Earnings roll on with companies including, Daimler, Credit Suisse, Deere, Danone and Nestle.
- FOMC minutes from the January meeting.
- U.S. retail sales figures.
To date, number of confirmed worldwide cases for COVID-19 pandemic has surpassed 109.492 million affecting 213 countries and territories around the world and 2 international conveyances, recording more than 2.418 million fatality globally.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 106.491 and 106.902.
- Support line of 105.163 and 104.752.
Commentary/ Reason:
The dollar eased 0.17% against the yen after briefly peaked to hit a 5-month high earlier today.
The USD/JPY last traded at 105.855.
The dollar was boosted as U.S. bond yields jumped on the prospects of further economic recovery and a possible acceleration in inflation. The yen, which is sensitive to U.S. yields, reacted the most with the dollar jumping as high as 106.217 yen.
The yen also weakened on comments from BoJ Governor Kuroda, who signalled the BoJ would maintain its extremely easy monetary policies.
The yen however, regained its losses as financial market slipped.
Investors focus today will be on the minutes from the Federal Reserve's January meeting, where it reaffirmed its pledge to maintain a dovish policy stance.
