EQUITIES
Shares in Asia-Pacific were mixed on Wednesday trade. The mainland Chinese stocks slipped, as the Shanghai composite traded 0.77% lower, while the Hong Kong’s Hang Seng index fell 0.23%. Over in Southeast Asia, Singapore’s Straits Times index dropped 0.70%, and while in India, the S&P BSE Sensex traded above the flatline. The Japan’s Nikkei 225 lost 0.48%.
Elsewhere, South Korea’s KOSPI edged 0.60% higher, and the Australian stocks advanced as the S&P/ASX 200 gained 0.09%.
Overnight on Wall Street, the Dow Jones Industrial Average fell 0.27%, to 34,299.33, the S&P 500 lost 0.20%, to 4,246.59 and the Nasdaq Composite dropped 0.71%, to 14,072.86.
OIL
Crude oil edged higher, buoyed by the falling stockpiles and a recovery in demand in the second half of 2021 that encouraged investors.
Brent gaining for a fifth consecutive session, traded at $74.66 per barrel, and U.S. crude futures traded at $72.75 per barrel.
Overnight, the Brent closed at $73.99 while WTI ended at $72.12 per barrel.
CURRENCIES
The benchmark 10-year U.S. yields were 1.501%, little higher than Monday, and rebounded from Friday's 3-month low.
The dollar index held steady at 90.518, having hit a 1-month high of 90.677 on Tuesday despite mixed U.S. economic data. The dollar held on to its recent gains against major currencies, as investors tried to ascertain if the Federal Reserve might alter the language on its stimulus following a recent jump in U.S. inflation.
Cryptocurrencies was fairly quiet, with Bitcoin fluctuating around $40,000. Ether also remained well within recent ranges at $2,500.
GOLD
Gold holding its prices, as investors awaited the U.S. Fed meeting for further clarity on rising inflation and monetary policy going forward.
The spot gold little changed at $1,858.70 an ounce and rose to $1,859.40 per ounce for gold futures. Previously closed at $1,858.70 and $1,856.40, respectively.
ECONOMIC OUTLOOK
Asian shares were subdued on Wednesday with investors struggled for direction, jittery in anticipation of the outcomes of data releases in China as well as the U.S. Federal Reserve’s interest rate decision.
A looming data dump on Chinese retail sales and industrial production offered reasons for caution, with some modest slowdown in annual growth expected.
And at the end of its two-day FOMC policy meeting, while the central bank is not expected to take any action, traders will watch for comments on inflation and the Fed’s eventual tapering plans.
In data by the Commerce Department on Tuesday, U.S. retail sales in May fell 1.3%, more than expected, while the PPI jumped by 6.6% year-over-year, the largest gain since November 2010.
American Petroleum Institute cited that U.S. crude stocks fell by 8.5 million barrels in the week ended June 11, while gasoline inventories rose by 2.85 million barrels and distillate stocks climbed by 1.96 million barrels. Official government data is due out later today.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 110.198 and 110.281.
- Support line of 109.928 and 109.845.
Commentary/ Reason:
The dollar was a shade firmer on the yen at 110.058, hovers below 110.164, a fresh 1-week high recorded yesterday.
The dollar is treading water ahead of the outcome of the FOMC meeting, where there is a chance that the FOMC will start discussing when it should begin tapering its $120 billion per month QE program. The FOMC will also update its economic forecasts and may drop hints about the timing of QE tapering.
A higher T-note yields also give edge to the dollar.
The yen meanwhile was weighted, with the Bank of Japan expected to extend some of its pandemic relief measures this week. The BoJ will meet for a two-day rate review ending on Friday.
