EQUITIES
Shares in Asia-Pacific were higher in Tuesday trade as investors looked ahead to the release of U.S. consumer inflation data for August.
The Japan’s Nikkei 225 rose 0.47%, the South Korea’s KOSPI added 0.89%, and the Australia’s S&P/ASX 200 climbed 0.18%. The Straits Times index in Singapore rose 0.48%, and the S&P BSE Sensex in India gains 0.40%.
Mainland Chinese stocks also saw small gains, with the Shanghai composite rising 0.05%. The broader Hang Seng index in Hong Kong meanwhile bucked the overall trend, to sit fractionally lower, struggling to recover from its Monday drop.
Overnight on Wall Street, the Dow Jones Industrial Average rose 0.76%, to 34,869.63, the S&P 500 gained 0.23%, to 4,468.73 and the Nasdaq Composite dropped 0.07%, to 15,105.58.
OIL
Oil prices extended gains on Tuesday, on signs another storm could affect output in Texas this week even as the U.S. industry struggles to return production after Hurricane Ida wreaked havoc on the Gulf Coast.
Both benchmarks were hovering near their highest since early August hit the previous day. The Brent now traded at $73.94 per barrel, while U.S. crude futures traded at $70.89 per barrel.
On Monday, the prices topped 6-week highs. The Brent ends at $73.51 a barrel, and the WTI at $70.45 per barrel.
CURRENCIES
The dollar index was steady at 92.616 after hitting a 2-week high on Monday of 92.87.
The yield on benchmark 10-year Treasury notes rose to 1.336% compared with its U.S. close of 1.324% on Monday. The two-year yield, which rises with traders' expectations of higher Fed fund rates, touched 0.2129% compared with a U.S. close of 0.215%.
In the cryptocurrencies market, Bitcoin dropped to as low as $43,400, its lowest in almost a week and last stood at $45,107 while ether changed hands at $3,275.
GOLD
Gold prices edged lower on Tuesday as a stronger dollar crimped bullion's appeal ahead of U.S. inflation data.
Spot gold fell 0.17% to $1,790.50 per ounce, and the U.S. gold futures eased slightly to $1,793.30.
Silver fell 0.38% to $23.70 per ounce, platinum was down 0.33% at $954.30 and palladium rose 0.23% to $2,084.50.
ECONOMIC OUTLOOK
Asian stocks on steady path Tuesday after the U.S. market snapped a five-day drop ahead of inflation data that could impact expectations of the likely timeline for a reduction in Federal Reserve stimulus.
China's tightening grip on its technology companies and a widening liquidity crisis for the country's most indebted developer continued to keep investors on edge. China's technology stocks are being closely scrutinised after authorities told the country's tech giants to stop blocking each other's links on their sites.
Investors' focus now shifts to Tuesday's U.S. CPI data, which will give a broad picture of the country's economic recovery ahead of the Federal Reserve's meeting next week. The expectations are that it will likely show inflation stateside continuing to run hot.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 110.190 and 110.305.
- Support line of 109.820 and 109.705.
Commentary/ Reason:
The dollar stood at 110.075 yen, rose 0.12% but still staying in its familiar territory over the past few weeks around 110.
The Japanese yen was weighted as the Nikkei advanced for a third day and hit a more than 31-year high on Tuesday, reducing the safe-haven demand for the yen.
The rally in U.S. yields meanwhile lend support to the greenback.
Intraday bias in USD/JPY stays neutral at this point as sideway trading continues. On the upside, for bulls to dominate, the pair must move towards the resistance levels at 110.190 and 110.305.
On the other hand, the bears will regain control of the trend if the pair moves towards the support levels at 109.82 and 109.70.
Market's focus is Tuesday's U.S. CPI data as higher readings will reinforce market expectation of Fed's tapering at next week FOMC meeting.
