EQUITIES
Asia-Pacific markets traded higher on Monday, though trading was subdued as financial markets in Australia, mainland China and Hong Kong are closed for holidays.
In Japan, the Nikkei 225 jumped 0.79%, while the South Korea’s KOSPI hovered above the flatline, to add around 0.03%. The Singapore’s Straits Times index also nudged higher, at 0.86%. The India’s S&P BSE Sensex index meanwhile bucked the overall trend by slipping -2.35% lower.
OIL
Oil prices dipped after OPEC+ agreed last week to gradually ease some of its production cuts between May and July. The Brent crude futures traded to $64.26 per barrel, and the U.S. crude futures at $60.87 per barrel.
On ending of last week, the Brent closed at $64.86 while WTI futures ended at $61.45 per barrel.
CURRENCIES
U.S. bonds came under pressure on worries the Federal Reserve may bump up interest rates sooner than it has indicated. A better-than-forecast U.S. labour data is raising questions about whether the Fed can stick to its pledge that it will keep interest rates through 2023 on the prospects of a return to a full employment.
Yields on longer-dated bonds rose, with 10-year notes at 1.725% in Asia on Monday, extending its rise that began on Friday after the job report.
The dollar steady as investors looked ahead to data on the U.S. services sector later in the week for affirmation of a solid economic rebound from the coronavirus shock. The dollar index against a basket of six major currencies was little changed at 93.01.
GOLD
The spot gold slipped to trade at $1,724.60 an ounce, while retreated to around $1,725.80 per ounce for gold futures. Previously closed at $1,730.30 and $1,728.40, respectively.
Silver also tumbled to $24.75, while platinum lose to $1,203.00 and palladium retreated to $2,560.00.
ECONOMIC OUTLOOK
Asian stocks opened easier but rebounded higher mid-morning, tracking the positive sentiment brought about by strong manufacturing data around the world and a drop in bond yields. Although trading activities are expected to tone down for the day as some of the global markets are still off for public holiday.
The ASEAN manufacturing sector returned to growth in March, following declines in February, as output and orders increased during March. According to IHS Markit PMI released today, the figure increased to 50.8 in March, from 49.7 in February, signalling a slight improvement in the health of the manufacturing sector.
Investors are likely to remain optimistic on technology stocks, given the positive close last week of the Nasdaq composite on Wall Street, while laggard counters in the property and construction sectors may gain traction as they are perceived to be recovering with the broader market.
Oil prices slipped after OPEC+ agreed to ease production curbs by 350,000 bpd in May, another 350,000 bpd in June and further 400,000 bpd or so in July.
To date, number of confirmed worldwide cases for COVID-19 pandemic has surpassed 131.21 million, recording more than 2.85 million fatality globally.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 110.848 and 111.032.
- Support line of 110.480 and 110.296.
Commentary/ Reason:
The dollar was last quoted at 110.637 yen, little moved from opening, though not far from Wednesday's 1-year peak of 110.963.
The USD/JPY pair has stalled just before the 110.848 resistance line.
Trading is likely to be muted as indecision and neither buyers nor sellers are dominating price action on Monday as most market are still shut and on the holiday mood.
