EQUITIES
Asia-Pacific markets traded higher on Tuesday. Mainland Chinese stocks advanced as the Shanghai composite rose 0.59% while the Hong Kong’s Hang Seng index soared 1.18%. The Nikkei 225 in Japan gained 0.06%, while the Singapore’s Straits Times index nudged 0.69% higher. Elsewhere, South Korea’s KOSPI gained 0.99%, and the India’s S&P BSE Sensex index rose 1.60%.
Shares in Australia meanwhile bucked the overall trend by slipping -0.65% lower.
Overnight on Wall Street, the Dow Jones Industrial Average closed 98 points higher at a fresh record of 33,171. The S&P 500 declined fractionally on the day to 3,971.09 while the Nasdaq Composite dipped 0.6% to 13,059.65.
OIL
Oil climbed to the highest in almost 2-weeks as attention switched to an OPEC+ meeting this week, with speculation that renewed demand concerns will push the group to keep production in check. The Brent crude futures traded to $65.11 per barrel, and the U.S. crude futures at $61.67 per barrel.
Overnight, the Brent closed at $64.98 for Brent while WTI futures ended at $61.56 per barrel.
CURRENCIES
The dollar gained, as did Treasury yields, taking the 10-year benchmark back above 1.70%, while the dollar index hovered near a 4-1/2-month high of 92.93 reached on Monday.
The safe-haven greenback also found support bids on concerns about the potential fallout from a hedge fund, reportedly Archegos Capital.
Bitcoin pushed back above $57,400 overnight after Visa Inc. said it would allow the use of cryptocurrencies to settle transactions on its payment network.
GOLD
Gold slipped more than 1% to a more than 2-week low as a firm dollar and rising U.S. Treasury yields dented the safe-haven metal's appeal. The spot gold retreated to trade at $1,707.70 an ounce, while slipped to around $1,705.30 per ounce for gold futures. Previously closed at $1,711.70 and $1,712.20, respectively.
ECONOMIC OUTLOOK
Shares in Asia-Pacific traded firmer on Tuesday after U.S. equities bounced off session lows, and as investors looked ahead to the economic reopening amid rapid progress in the U.S. vaccine rollout, overshadowing the risk of further fallout from recent block sales.
Financial and bank shares are watched following a hedge fund default concerns that triggered worldwide sell-off in banking stocks. Movement in shares of Japan’s Nomura and Credit Suisse of Switzerland are especially watched following a potential billions of losses due to transactions with an unnamed U.S. client that resulted in plunge their Monday stocks.
Investors also have been focusing on the strength of the recovery and inflation risks as governments step up spending to spur growth. Tomorrow, the U.S. president plans to unveil a further stimulus program with a tilt toward infrastructure, while the monthly U.S. non-farm payrolls report will be closely watched at the end of this week.
To date, number of confirmed worldwide cases for COVID-19 pandemic has surpassed 127.58 million, recording more than 2.79 million fatality globally.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 110.027 and 110.237.
- Support line of 109.350 and 109.141.
Commentary/ Reason:
The dollar climbed to a 1-year high against the yen on Tuesday amid a spike in Treasury yields, as well as accelerating vaccinations and massive stimulus in the U.S. that stoked inflation concerns.
The dollar rose around 0.17% and last held at 109.482 yen, with the first resistance at 110.027.
Longer-dated U.S. Treasury yields rose on expectations that U.S. President Joe Biden's infrastructure initiative to be announced on Wednesday could mean faster economic growth and a dramatic increase in Treasury bond issuance.
The greenback also found support as investors worried about the potential fallout from the collapse of a hedge fund, identified as Archegos Capital, weighted on Japan’s banking sector.
Meanwhile earlier today, BoJ Governor Kuroda said that while the Japan and global economy are picking up, he warned that risks to the economic and price outlook were skewed to the downside, stressing the BoJ’s readiness to ease monetary policy “without hesitation” as needed with an eye on developments over the pandemic.
