EQUITIES
Shares in Asia-Pacific were mixed on Thursday trade. The Shanghai composite rose 0.23%, following a resilient economic data from mainland China. Hong Kong’s Hang Seng index gained 1.22%.
South Korea’s KOSPI advanced 0.52%, and the S&P BSE Sensex in India rose 0.22%.
In Japan, the Nikkei 225 declined 1%, while the S&P/ASX 200 in Australia slipped 0.26%, and the Singapore’s Straits Times index shedding 0.39%.
Overnight on Wall Street, the Dow Jones Industrial Average rose 0.13% to end at 34,933.43 points, while the S&P 500 gained 0.12% to 4,374.38. The Nasdaq Composite dropped 0.22% to 14,644.95.
OIL
Oil prices eased after major global oil producers came to a compromise about supply and after U.S. data showed demand slacked off a bit in the most recent week.
The Brent now traded at $74.17 per barrel, and U.S. crude futures traded at $72.52 per barrel.
Overnight, the Brent closed at $74.76, while WTI ended at $73.13 per barrel, down more than 2% for both benchmarks.
CURRENCIES
Bond yields dipped globally, with the 10-year U.S. Treasuries yield slipping to 1.332%, having peaked out at 1.423% on Wednesday.
In the currency market, Powell's dovish stance also put a dent on the U.S. dollar, although spiking coronavirus cases kept the dollar supported. Against a basket of six major currencies, the dollar index was last steady at 92.416.
GOLD
Gold prices slipped on Thursday, just below a 1-month high hit in the previous session as the dollar clawed up.
The spot gold rose to $1,825.90 an ounce and added to $1,827.60 per ounce for gold futures. Previously closed at $1,827.30 and $1,825.00, respectively.
ECONOMIC OUTLOOK
Asian shares were mixed in Thursday trade as investors digesting a series of China’s economic data released today, as well as U.S. Fed Chair Jerome Powell's congressional testimony overnight.
Powell gave fresh assurance to the markets that the Fed is not too hawkish about taming inflation. In testimony to the U.S. House of Representatives Financial Services Committee, Powell said he is confident recent price hikes are associated with the country's post-pandemic reopening and will fade.
His comments came over concerns that the dollar inflation have increased after data published this week showed CPI increased by the most in 13 years in June while PPI accelerated to the largest annual increase in more than a decade.
The market also be monitoring a series of China’s economic data released today. China's economic growth expanded 7.9% in the April-June quarter from a year earlier, official data showed on Thursday, slowed down significantly from a record 18.3% expansion in the January-March period. Meanwhile, retail sales in June jumped 12.1% from a year earlier, above expectations for a 11% increase. The industrial output rose 8.3% year-on-year in June, against expectations for a 7.8% increase.
U.S. Energy Information Administration data showed crude stockpiles fell for the eighth straight week last week, declined by 7.9 million barrels in the week to July 9, larger than expectations for a decrease of 4.4 million barrels.
Earnings from major companies also will be major focus today, by such as Morgan Stanley, UnitedHealth, Truist, Bank of NY Mellon and Alcoa, as well as Taiwanese chipmaker TSMC.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 110.687 and 110.999.
- Support line of 109.709 and 109.406.
Commentary/ Reason:
The safe-haven yen rose 0.07% at 109.869 per dollar on Thursday, extending its 0.6% gain from overnight.
The dollar retreated from recent peaks, following further reassurance from Fed chair Jerome Powell that he was in no rush to tighten policy, though losses were kept in check by investor nerves ahead of Asian economic data. A decline in T-note yields also undercut the dollar.
However, concern that the pandemic is worsening in Japan is negative for the yen after Tokyo reported 1,149 new infections on Wednesday, the most in 6 months.
The USD/JPY pair rejected the recent ascending trendline which has developed as a key resistance area. As such, price action is now once again pulling back.
