EQUITIES
Shares in Asia-Pacific were higher on Tuesday trade. The Shanghai composite index led gains among the region’s major markets, rising 1.60%, followed by the Hong Kong Hang Seng index by 1.26%. Elsewhere, the Japan’s Nikkei 225 added 0.60%, the South Korea’s KOSPI advanced 0.77%, the Australia’s S&P/ASX 200 rose 0.64%, the Singapore’s FTSE Straits Times Index climbed 0.50%, and the India’s S&P BSE Sensex index was 0.33% higher.
Overnight on Wall Street, the Dow Jones Industrial Average rose 0.54%, to 34,393.98, the S&P 500 gained 0.99%, to 4,197.05 and the Nasdaq Composite added 1.41%, to 13,661.17.
OIL
Oil further advanced as investors tracked progress toward the revival of the Iranian nuclear deal and a recovery in the U.S. economy before the summer driving season.
The Brent crude futures traded at $68.68 per barrel, and U.S. crude futures traded at $66.18 per barrel.
Overnight, the Brent closed at $68.46 while WTI ended at $66.05 per barrel.
CURRENCIES
The yield on benchmark 10-year Treasury notes fell to 2-week lows, was at 1.606% after a few Fed officials affirmed their support to keep monetary policy accommodative for some time.
The dollar languished near 4-month lows against major currencies on Tuesday, edged down to 89.75.
Cryptocurrencies recovered some losses after a weekend selloff. Bitcoin added to gain after Elon Musk tweet about meeting with North American miners of the cryptocurrency. On Tuesday, the Bitcoin was at approximately $37,960, rose about 8%.
GOLD
Gold prices edged lower as hopes of quick economic recovery lifted demand for riskier assets, although a weaker dollar and Treasury yields limits losses.
The spot gold slipped to trade at $1,878.80 an ounce and down to $1,879.80 per ounce for gold futures. Previously closed at $1,880.50 and $1,884.50, respectively.
Palladium rose to $2,751 per ounce, silver edged lower at $27.74, while platinum edged 0.2% higher to $1,180.1.
ECONOMIC OUTLOOK
Asian stocks were steady Tuesday after technology shares spurred a Wall Street rally as Federal Reserve officials tried to soothe concerns about inflation.
Technology stocks in Asia-Pacific were in focus on Tuesday. A retreat in U.S. Treasury yields helped lift expensive stocks in sectors such as technology as investors attempt to measure the trajectory of inflation.
Inflation concerns cooled for the time being as investors may be starting to view President Biden's infrastructure bill as likely to be smaller, or unable to provide as big an economic boost, even after being pared down in size on Friday.
Fed officials affirmed their support to keep monetary policy accommodative for some time. St. Louis Fed President James Bullard said he expects the inflation rate to be above 2% both this year and the next but several Fed officials, including Bullard, continued to support the central bank's policy in separate remarks.
Ahead on Tuesday is a German business survey, a series of U.S. housing updates and a handful of policymaker speeches in Europe, Britain and the U.S., which will all be parsed for a reading on inflation.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 109.159 and 109.481.
- Support line of 108.515 and 108.193.
Commentary/ Reason:
The pair was little changed on Tuesday, trading rangebound as traders awaited on more economic data for the day to gauge for the next inflation trajectory.
The dollar was last at 108.737 per yen.
An advancement in the Nikkei Stock index on Tuesday, following Monday’s rally to a 1-1/2 week high, curbed the safe-haven demand for the yen and limits the losses in the USD/JPY.
Concerns about increasing COVID-19 cases in Japan meanwhile continue to weigh on the foreign exchange trading. Although comments from BOJ Governor Kuroda lifted the yen slightly when he said the global economy is starting to see the light at the end of the pandemic tunnel.
The lower 10-year T-note yield on Tuesday also weakened the dollar’s interest rate differentials.
