EQUITIES

 

Shares in Asia-Pacific were mixed on Monday. The Nikkei 225 in Japan rose 0.61% while the South Korea’s KOSPI sat just above the flatline.

Over in Southeast Asia, Singapore’s Straits Times index slipped fractionally, down 0.08%, and in India, the S&P BSE Sensex declined about 0.58%.

Markets in Australia, mainland China and Hong Kong are closed on Monday for holidays.

 

OIL

 

Oil prices rose on an improved outlook for demand as increased COVID-19 vaccinations help lift travel curbs, although caution remains as Saudi Arabia had unwound all its voluntary production cuts, which could drag oil prices lower.

The Brent traded at $73.02 per barrel, and U.S. crude futures traded at $71.25 per barrel.

On Friday, the Brent closed at $72.69 while WTI ended at $70.91 per barrel.

 

CURRENCIES

 

U.S. bond yields flirted with 3-month lows ahead of the Fed's policy meeting later this week. The 10-year U.S. Treasuries stood at 1.464%, having fallen to 1.428% on Friday.

The dollar was steady. The index hovers near a 1-week high against its rivals, last sat at 90.533.

Bitcoin jumped above $39,000 after Elon Musk said Tesla would resume transactions with the cryptocurrency when mining it is done with more clean energy. The billionaire has whipsawed Bitcoin and other digital tokens with a string of social media posts in the past few months.

Ether was at around $2,500, the middle of a narrowing trading range spanning the past month.

 

GOLD

 

Gold prices fell to a more than 1-week low on Monday, weighed down by a stronger dollar as focus turns to the Fed policy meeting.

The spot gold down to trade at $1,864.40 an ounce and slipped to $1,866.10 per ounce for gold futures. Previously closed at $1,877.80 and $1,879.60, respectively.

 

ECONOMIC OUTLOOK

 

Global shares were mixed to start the week as investors prepare for a key Federal Reserve meeting. Equity markets were basking in the prospects of a broadening economic recovery from the coronavirus pandemic and anticipation of continuity in dovish monetary policy from the U.S. Federal Reserve.

Focus now shifts to the Fed's June 15-16 FOMC policy meeting for further clarity on the policymakers' view on rising inflation and economic recovery. Many investors expect the Fed to repeat its dovish view.

 

TECHNICAL OUTLOOK

 

[USDJPY]

Important Levels to Watch for Today:

-        Resistance line of 109.805 and 109.925.

-        Support line of 109.565 and 109.445.

Commentary/ Reason:

  1. The pair stood little changed at 109.735, held below its highest since June 4.

  2. The pair traded in caution ahead of the Fed meeting that runs two days to Wednesday. Traders weighed if inflationary pressure as the economy reopens after the pandemic could force the FOMC into an earlier tapering of stimulus.

  3. The yen meanwhile slightly slanted after the Bank of Japan is set to keep its money spigots wide open and may extend its pandemic-relief programmes next week to support a fragile economic recovery, though decline was held by the index for production that rose 2.9% in April from the previous month.

  4. USD/JPY pair has once again rebounded from the ascending trendline which remains intact as a key support level.

USDJPY