EQUITIES
Shares in Asia-Pacific traded lower on Tuesday. The Hang Seng index in Hong Kong dropped 1.13%, and the Shanghai composite down 1.04%. In Japan, the Nikkei 225 slipped 0.83% while the South Korea’s KOSPI also declined 1.41%. Australian stocks also fell into negative territory, erasing earlier gains, as the S&P/ASX 200 shed 0.32%, while the Straits Times index in Singapore traded 0.11% lower.
Overnight on Wall Street, the Dow Jones Industrial Average fell 0.72%, to 34,496.06, the S&P 500 lost 0.69%, to 4,361.19 and the Nasdaq Composite shed 0.64% to 14,486.20.
OIL
Oil prices fell for the first time in four days on Tuesday, taking a pause after weeks of gains.
The recent jump in oil prices comes as a rebound in global demand contributed to power shortages in Asia, Europe, and the U.S. Soaring natural gas prices are also encouraging power generators to swap the cleaner-burning fuel for oil. Switching to oil from natural gas for power production may boost demand for crude by between 250,000 to 750,000 barrels per day. Last week, the OPEC+ also opted against a supply boost, further fuelling the oil price rally.
The Brent now traded at $83.68 per barrel, while U.S. crude futures traded at $80.40 per barrel.
Overnight, the Brent ends at $82.65 a barrel, touching three-year highs, and the WTI at $80.52 per barrel, the highest since late 2014.
CURRENCIES
The yield on benchmark 10-year yield extended gains, at 1.612%, their highest since June.
The dollar index, which tracks the greenback against a basket of peers, was at 94.336, not far from its one-year high of 94.504 touched at the end of September.
Commodity currencies also robust, gaining on surging energy prices and a bounce in iron ore. The Aussie dollar stayed firm at $0.7342, a day after hitting a month high.
GOLD
Gold traded flat in early Asian trade on Tuesday as the dollar held firm on expectations that the Federal Reserve will announce a tapering of its bond purchases next month.
Spot gold at $1,757.60 per ounce, while U.S. gold futures were at $1,758.10.
Spot silver fell 0.26% to $22.60 per ounce, while platinum rose 0.21% to $1,009.00. Palladium was down 1.25% to $2,093.00, having hit its highest since Sept. 10 at $2,182.67 overnight.
ECONOMIC OUTLOOK
Asian shares dropped and the safe-haven dollar held firm on Tuesday, as a global energy crunch fuelled inflation fears, clouding investor sentiment before the U.S. corporate earnings season.
Mood in Asia could also be hit by news that Chinese Evergrande may miss its third round of bond payments in as many weeks and rivals Modern Land and Sinic became the latest scrambling to delay deadlines. The Evergrande's debt troubles and contagion worries have sent shockwaves across global markets in recent months and the firm has already missed payments on dollar bonds, worth a combined $131 million, that were due on Sept. 23 and Sept. 29.
Investors grew nervous ahead of third-quarter earnings reporting season. JPMorgan reports on Wednesday, followed by BofA, Morgan Stanley and Citigroup on Thursday, and Goldman on Friday.
