EQUITIES
Asia-Pacific markets were mixed on Monday. Australian shares reversed earlier losses as the benchmark ASX 200 climbed 0.09%. Japanese markets rose, where the Nikkei 225 notched up a 0.19% Elsewhere, the Singapore’s Straits Times index advanced 0.15%, and Hong Kong’s Hang Seng index rose 0.24%.
Chinese mainland shares struggled for gains as the Shanghai composite fell -0.92%. The South Korea’s KOSPI slipped -0.13% and the India’s S&P BSE Sensex index was down -1.36%.
OIL
Oil prices rose on Monday, with Brent heading toward $70 a barrel, as data showed China’s economic recovery accelerated at the start of 2021, boosting the energy demand outlook at the world’s largest oil importer. The gain came despite a firmer tone in the dollar.
The Brent crude futures traded to $69.70 per barrel, while the U.S. crude futures at $66.01 per barrel.
On Friday, the Brent closed at $69.22 for Brent while WTI futures ended at $65.61 per barrel.
CURRENCIES
The U.S. dollar held firm on Monday after bouncing off a 1-week low last week, held around 91.81, supported by a spike in benchmark Treasury yields to more than 1-year highs.
Surging bond yields continue to preoccupy investors concerned about the prospect of excessive inflation amid a wave of stimulus and vaccine rollouts. Relatively smooth bond sales last week had eased concerns on the fixed-income outlook before yields spiked again Friday, weighing on growth stocks and underpinning a shift once more into value shares. The focus now turns to the FOMC decision later in the week.
Bitcoin takes breather to trade around $60,000 after retreated from record near $62,000 over the weekend.
GOLD
Bounce in Treasury yields kept gold prices gains in check. Gold spot slipped to trade at $1,721.10 an ounce, while rose around $1,720.70 per ounce for gold futures. Previously closed at $1,719.80 and $1,712.60, respectively.
ECONOMIC OUTLOOK
Asia-Pacific markets traded mixed on Monday while U.S. bond yields hovered near a 13-month peak on Monday, as investors put hope on the mammoth U.S. stimulus that is supposedly help the global economy.
Market sentiments remain cautious ahead of the upcoming U.S. Fed meeting on Wednesday, where it will deliver its decision on interest rates and revision on its GDP forecast.
To date, number of confirmed worldwide cases for COVID-19 pandemic has surpassed 119.8 million, recording more than 2.65 million fatality globally.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 109.462 and 109.826.
- Support line of 108.248 and 107.920.
Commentary/ Reason:
The dollar rose 0.2% against the yen to 109.251 yen, drifting past its highest since June 2020.
The dollar gained on the low-yielding yen, supported by the stabilizing Treasury yields.
The yen was also under pressure Friday on a Bloomberg report that said the BOJ at next week’s policy meeting is considering releasing an analysis of the potential impact of lowering its negative interest rates to show its determination to use this option if needed. The BOJ will release details of its policy review that is to be held at the end of this week.
Focus this week also will be on the U.S. Federal Reserve’s 2-day policy meeting although expectations are running low for the central bank to announce major policy changes.
The rally in global equity markets also curbed the yen’s safe-haven appeal.
