EQUITIES
Asia-Pacific markets traded mixed on Friday where Chinese mainland shares rose. The Hong Kong’s Hang Seng index jumped 0.51%, while the mainland Shanghai was up 0.49%. The South Korea’s KOSPI also advanced, added 0.25% higher.
Other regional stocks mostly declined, with the Japan’s Nikkei 225 slipped 0.56%, the Singapore’s Straits Times index fell 0.81%, and the S&P BSE Sensex in India shed 0.14%. The Australia’s S&P/ASX 200 trade near flat.
Wall Street closed lower on Thursday, ending a four-day win streak for the Dow while the S&P 500 and the Nasdaq Composite both broke five-day win streaks. The Dow Jones Industrial Average fell 0.54%, to 35,213.12, the S&P 500 lost 0.58%, to 4,469.92 and the Nasdaq Composite 0.64%, to 14,945.81.
OIL
Oil prices rose on Friday, as energy companies began shutting production in the Gulf of Mexico ahead of a potential hurricane forecast to hit on the weekend.
Companies started airlifting workers from Gulf of Mexico oil production platforms on Thursday and BHP and BP said they have begun to stop production at offshore platforms as a storm was brewing in the Caribbean Sea, forecast to barrel through the Gulf on the weekend. Gulf of Mexico offshore wells account for 17% of U.S. crude oil production and 5% of dry natural gas production. Over 45% of total U.S. refining capacity lies along the Gulf Coast.
The Brent now traded at $71.72 per barrel, while U.S. crude futures traded at $68.05 per barrel. Brent is on track for a rise of more than 9% this week, its biggest weekly jump since June 2020 mostly on relief that China has contained an outbreak of the Delta variant.
Oil settled lower on Thursday, snapping a three-day rally on renewed demand concerns. The Brent settled at $71.07 a barrel, and the WTI ends at $67.42 per barrel.
CURRENCIES
The dollar held firm after bouncing off a 1-week low in the previous session. The dollar index stood at 93.000, bouncing back from Thursday’s low of 92.807.
The yield on benchmark 10-year Treasury notes was 1.341% down from a 2-week high of 1.375% set the day before, as traders were cautious ahead of Powell's speech.
In cryptocurrencies, bitcoin slipped to $46.610 while ether also eased to $3,084.
GOLD
Gold prices were steady on Friday. The spot gold rose 0.40% to $1,799.70 per ounce. U.S. gold futures rose 0.31% to $1,800.700.
Silver was higher at $23.62 per ounce, while platinum rose 0.67% to $982.00. Palladium rose 0.74% to $2,410.00.
ECONOMIC OUTLOOK
Asian markets were mixed on Friday as investors turned cautious about the potential for future regulatory crackdowns in China, and caution ahead of the upcoming Jackson Hole Symposium.
The stocks also were lower today as profit taking began to emerge following five consecutive days of strong gains. Hawkish commentary from Dallas Fed President Robert Kaplan and a blast outside the Kabul airport in Afghanistan also helped strengthen the risk-off sentiment.
Data showed the U.S. economy grew a bit faster than initially thought in the Q2, in a second estimate of GDP growth, while weekly jobless claims increased 4,000 to a seasonally adjusted 353,000 for the week ended Aug 21.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 110.395 and 110.735.
- Support line of 109.715 and 109.375.
Commentary/ Reason:
The Japanese yen traded at 109.930 against the dollar, strengthening from an earlier level around 110.09, although still meandering near the centre of its trading range since early July.
The yen strengthened and USD/JPY gave up most of its earlier gains after T-note yields fell back from their highs.
Thursday’s U.S. economic data was bearish for the dollar. U.S. weekly initial unemployment claims rose +4,000 to 353,000, slightly weaker than expectations of 350,000. Also, U.S. Q2 GDP was revised upward to 6.6% from 6.5%, weaker than expectations of 6.7%.
The USD/JPY pair has room to extend its advance, once above 110.39, the immediate resistance level. Meanwhile, technical indicators are retreating modestly from intraday highs, still developing within positive levels.
The pair bottomed at around 109.37 on Tuesday, now act as the support level, as well as at 109.71.
The focus today will be Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium, which will be parsed for clues on the timing and pace of tapering of monetary stimulus. Signals that Fed officials viewed a taper this year most likely will helped buoy the dollar.
