EQUITIES
Asian shares were mostly up on Monday, led by the rally in the Japanese stock market amidst the imminent resignation of Japanese prime minister Yoshihide Suga. Japan's Nikkei added 1.76%, followed by mainland Chinese stocks over speculation Beijing would be adding stimulus through fiscal and monetary policy. The Shanghai composite gained 0.87% and the Hong Kong’s Hang Seng index rose 0.72%.
Elsewhere, shares in Singapore, Taiwan and India all gained, while those in Malaysia and the Philippines eased, as well as in South Korea’s KOSPI and Australia’s S&P/ASX 200.
In Thailand, the SET Composite index was flat in Monday trade. That came after the country’s prime minister and several other cabinet ministers survived a vote of no confidence in parliament over the weekend.
Meanwhile European stocks are expected to open in mixed territory on Monday as investors digest the last week jobs data from the U.S.
The U.S. markets are closed Monday for the Labor Day holiday
OIL
Oil prices declined on Monday, falling after the world's top exporter Saudi Arabia slashed crude prices for Asia over the weekend, signalling demand concerns and those global markets are well supplied. Saudi Arabia slashed prices of all crude grades to Asian customers in October versus September, but left prices to northwestern Europe and the U.S. steady.
The Brent now traded at $71.77 per barrel, while U.S. crude futures traded at $68.44 per barrel.
On Friday last week, the Brent settled at $72.61 a barrel, and the WTI ends at $69.29 per barrel.
CURRENCIES
The dollar languished near a 1-month low versus major peers on Monday, after the U.S. labour data last week pushed back expectations for when the Federal Reserve will begin tapering its massive stimulus.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 92.202 after a recent slide from above 92.4.
In cryptocurrencies, bitcoin was about flat at $51,784, after earlier touching $51,920, a level not seen since May 12. Smaller rival ether traded little changed at $3,926 after topping $4,000 last week for the first time since mid-May.
GOLD
Gold prices hovered on Monday below a 2-1/2-month peak on easing concerns about a quicker start to Fed tapering.
The prospect was positive for non-yielding gold, which stood at $1,825.70 an ounce, having reached its highest since mid-June at $1,833.80. The U.S. gold futures eased 0.27% to $1,828.70.
Silver was steady at $24.87 per ounce. Prices rose 3.4% in the previous session, its biggest 1-day percentage gain since early May. Platinum fell 0.17% to $1,019.90, while palladium rose 0.50% to $2,428.50.
ECONOMIC OUTLOOK
Asian shares got off to a mixed start on Monday as investors were still assessing the fallout from the September payrolls report. A disappointing U.S. payrolls report promised to keep policy super-loose for longer, but also clouded the outlook for global growth and inflation.
Japanese stock market led market rally amidst the imminent resignation of Japanese prime minister Yoshihide Suga, which spurred hopes that the COVID-19 pandemic in the country would be better managed by his successor.
In China, officials pledged to tighten supervision in the financial services industry, highlighting the risk of further turbulence from a regulatory onslaught on the private sector.
Labor Department data showed on Friday U.S. nonfarm payrolls increased by 235,000 jobs last month, below economists' expectations of 728,000, as hiring in the leisure and hospitality sector stalled amid a resurgence in COVID-19 infections. Fed Chair Jerome Powell had hinted last month that reaching full employment was a pre-requisite for the central bank to start paring back its asset purchases.
Investors this week will also turn their attention to the ECB, which will decide this week if it should dial back economic stimulus. In China, PPI, CPI, new yuan loans, money supply, aggregate financing will be released on Thursday. While U.S. data will include the PPI index and consumer credit.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 109.906 and 110.091.
- Support line of 109.536 and 109.351.
Commentary/ Reason:
The greenback edged 0.1% higher to 109.785 yen.
The local note was continuing last week's trend, still meandering in the middle of its trading range of the past two months.
Intraday bias in USD/JPY remains neutral as sideway trading continues. On the upside, break of 109.906 will resume the rebound to retest 110.091 resistance for several recent trading. On the downside, break of 109.53 will target 10 next.
