EQUITIES
Asia-Pacific stocks were higher in Tuesday trade. Hong Kong’s Hang Seng index surged 1.56% as shares of Chinese tech firms listed in the city jumped. Mainland Chinese stocks were also higher as the Shanghai composite rose 1.00%.
The Nikkei 225 in Japan gained 1.01%, South Korea’s KOSPI jumped 1.42%, the S&P BSE Sensex in India added 0.19%, and the Singapore’s Straits Times index advanced 0.67%. In Australia, the S&P/ASX 200 edged 0.26% higher.
Wall Street rallied on Monday, with the Nasdaq reached an all-time closing high. The Nasdaq Composite added 1.55%, to 14,942.65, the Dow Jones Industrial Average rose 0.61%, to 35,335.71, and the S&P 500 gained 0.85%, to 4,479.53.
OIL
Oil prices rose on Tuesday after the U.S. FDA granted full approval to the Pfizer Inc/BioNTech SE COVID-19 vaccine, stoking investor hopes that higher fuel demand will follow a potential step up in vaccination rates.
The Brent now traded at $69.01 per barrel, while U.S. crude futures traded at $65.72 per barrel.
Oil prices rose more than 5% on Monday, after seven sessions of declines. The Brent settled at $68.75 a barrel, and the WTI ends at $65.64 per barrel.
CURRENCIES
The yield on benchmark 10-year Treasury notes was up at 1.262% compared with its U.S. close of 1.255% on Monday.
While the dollar index, which tracks the greenback against a basket of currencies of other major trading partners, was up slightly at 93.032.
GOLD
Gold prices fell slightly on Tuesday, although they hovered above the key psychological level of $1,800 on expectations that the U.S. Federal Reserve might delay cutting back its stimulus amid rising cases of the Delta coronavirus variant.
Spot gold eased 0.24% to $1,801.30 per ounce, having jumped about 1.4% in the previous session. U.S. gold futures were little changed at $1,803.10.
Silver fell 0.32% to $23.58 per ounce, while platinum edged 0.44% lower to $1,009.60. Palladium was steady at $2,394.50, having risen 5.5% in the previous session.
ECONOMIC OUTLOOK
Asian stocks rose on Tuesday following bounce on Wall Street overnight as investors drew comfort from full approval granted to the Pfizer/BioNTech vaccine and on easing worries of an imminent tapering of stimulus by the Federal Reserve.
The Pfizer/BioNTech’s COVID-19 vaccine became the first in the U.S. to be granted full approval by the FDA, clearing the path for more vaccine mandates.
Data from IHS Markit overnight showed strong, albeit slowing services and manufacturing activity in Europe while business activity growth in the U.S. slowed for a third straight month in August as the spread of the Delta virus variant took a toll. Britain's post-lockdown economic rebound slowed sharply in August as companies struggled with unprecedented shortages of staff and materials, though strong inflation pressures cooled a bit, the survey showed on Monday.
The U.S. Securities and Exchange Commission meanwhile has begun issuing new disclosure requirements to Chinese firms looking to list in New York, as part of a push to raise investor awareness of the risks involved.
Investors are now focused on Fed Chair Jerome Powell's speech at the annual Jackson Hole, Wyoming, symposium awaiting guidance on the U.S. central bank's taper plans.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 110.139 and 110.341.
- Support line of 109.488 and 109.278.
Commentary/ Reason:
The dollar was up 0.07% against the yen to 109.768. While the dollar made large gains on commodity and emerging market currencies, it has been more restrained against the Japanese yen, which is benefiting from safe-haven flows.
The dollar scaled slightly higher as the higher T-note yields boosted the greenback. The 10-year T-note yield rose to 1.65% on Tuesday.
The yen meanwhile was weakened on concern the worsening pandemic in Japan will lead to tighter restrictions that undercut economic growth. Japan’s vaccination rate still lags other developed nations and the country’s hospitals are battling its worse wave of the outbreak, and, amid this pandemic, Tokyo is hosting the Paralympic Games.
The USD/JPY pair shows sideways trades, seesawing around directionless and convergent moving averages, all of them lacking directional strength. The pair is waiting to motivate the price to resume the bullish trend that targets 110.14 as a next main station.
Meanwhile, the Momentum indicator turned lower at around its midline, while the RSI is mildly lower, favouring a bearish extension, mainly if the pair breaks below 109.48, the immediate support level.
