EQUITIES
Asia-Pacific markets rose after the U.S. Federal Reserve left its benchmark interest rate near zero.
Hong Kong’s Hang Seng index jumped 2.65%, continuing its bounce back after closing more than 1% up the day before. The index had dived more than 8% over two days early this week. Mainland Chinese stocks also saw strong gains, with the Shanghai composite rose 1.04%.
In Japan, the Nikkei 225 advanced 0.63%, while the S&P/ASX 200 in Australia climbed 0.44%. The Straits Times index in Singapore rose 0.49%, and the S&P BSE Sensex in India gains 0.30%. Elsewhere in the South Korea, the KOSPI index was flat.
Overnight on Wall Street, the Dow Jones Industrial Average fell 0.36%, to 34,930.93, the S&P 500 lost 0.02%, to 4,400.64 and the Nasdaq Composite added 0.7%, to 14,762.58.
OIL
Oil prices firmed Thursday after data showed crude stockpiles in the U.S. fell last week to their lowest since January 2020, bringing the market's focus back to tight supplies rather than caution on the rising COVID-19 infections.
The Brent traded at $75.00 per barrel, and U.S. crude futures traded at $72.63 per barrel. Overnight, the Brent closed at $74.74, while WTI ended at $72.39 per barrel.
CURRENCIES
The latest insistence from Fed chairman Jerome Powell that rate increases aren't on the radar eased the U.S. 10-year yields back to 1.233% after a brief pop higher, leaving them not far from recent 5-month lows of 1.128%.
The dollar index meanwhile dipped to 92.161 and hovered around a 2-week low.
A continuing recovery in Bitcoin has put the largest cryptocurrency on course for its longest winning streak this year. It’s advanced for eight straight days, its longest winning streak since December.
GOLD
Gold prices rose to its highest level in over a week on Thursday after the U.S. Fed failed to give a timeline for its tapering plans and said it was "ways away" from considering raising interest rates.
Spot gold rose 0.5% to $1,815.00 per ounce, having earlier hit a peak since July 20 at $1,817.35. Silver rose 1.52% to $25.25 per ounce. Palladium rose 0.80% to $2,643.50 per ounce, while platinum gained 1.34% at $1,072.30.
ECONOMIC OUTLOOK
Asian shares advanced on Thursday as investors digested the conclusion of FOMC 2-day meeting and spillover of the overnight U.S. market which was mixed with the Nasdaq rallying while the Dow fell amid a slew of corporate earnings. The mood also fragile as investors waited to see if Beijing could stem the recent bloodletting in Chinese shares.
The Fed's statement came at the conclusion of its latest 2-day policy meeting by keeping interest rates in a target range between zero and 0.25% and left unchanged its bond-buying program. Fed Chairman Jerome Powell said the U.S. central bank is nowhere near considering a rate hike despite the optimism over the U.S. economy.
While the U.S. central bank acknowledged discussing the eventual withdrawal of pandemic-era monetary policy support in its statement, Chairman Jerome Powell said the U.S. job market still had "some ground to cover" before it would be time to pull back. Powell also downplayed the risk of the spread of the Delta variant of the coronavirus on the economic recovery.
In oil market, crude inventories fell by 4.1 million barrels in the week to July 23, the U.S. EIA said, helped by lower imports and a decline in weekly production. Gasoline stocks also dropped, bringing them largely in line with pre-pandemic levels.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 110.320 and 110.541.
- Support line of 109.604 and 109.412.
Commentary/ Reason:
The dollar faded 0.10% to 109.805 yen, and away from a top of 110.588 early in the week.
The Japanese yen has found support throughout the week from nerves about the Delta coronavirus variant and jitters in China's equity market.
The dollar gave up its earlier advance and turned lower on dovish comments from Fed Chair Powell that also undercut the 10-year T-note yield. The dollar was also under pressure from concern that the worsening of the pandemic in the U.S will lead to tighter restrictions that curb economic growth.
The USD/JPY pair bounced bearishly after approaching the bearish channel’s resistance, to keep the bearish trend scenario valid and active for the upcoming period, with the first target is located at 109.60, around its weekly low.
