EQUITIES
Asia-Pacific markets were mixed across the board on Tuesday. Japan’s Nikkei 225 declined 0.85%, the ASX 200 in Australia fell 0.73%, and the Shanghai composite slipped 0.08%.
Elsewhere, the Hang Seng index in Hong Kong rose 0.37%, South Korea’s KOSPI added 0.12%, and in Southeast Asia, the FTSE Straits Times Index traded 0.43% higher.
OIL
Oil prices rose on Tuesday, with some risk appetite returning as the market awaited clues from the U.S. Federal Reserve chairman on potential rate rises and as some oil producers continued to struggle to beef up output. A weaker U.S. dollar on the day also helped support oil prices.
The market is waiting on U.S. oil and product inventory data from the API due at 2130 GMT on Tuesday, followed by data from the U.S. EIA on Wednesday.
The Brent now traded at $81.19 per barrel, and U.S. crude futures traded at $78.70 per barrel.
Oil price declines over the previous two sessions. Overnight, the Brent futures ends at $80.87 a barrel, while the WTI crude oil prices closed to $78.23 per barrel.
CURRENCIES
The U.S. dollar hovered near the middle of its recent range against major peers on Tuesday, failed to find significant support on rising Treasury yields. Traders looked to incumbent Fed Chair Jerome Powell's nomination hearing later in the day for new clues on the timing and pace of policy normalisation. The dollar index hovered around 95.871.
The benchmark 10-year Treasury yield rose to its highest level in nearly two years on Monday, breaching 1.8%. It retreated, at 1.753% on Tuesday.
The shift from risk also weighed on cryptocurrencies. Bitcoin fell below $40,000 overnight to hit its lowest level since August. It regained some lost ground and bounced to $42,272.
GOLD
Gold prices rose on Tuesday, supported by a pullback in both the U.S. dollar and Treasury yields. Spot gold rose 0.23% to $1,805.80 per ounce, and U.S. gold futures were up 0.36% at $1,805.30.
Spot silver was up 0.37% to $22.54 an ounce, platinum gained more than 1% to $945.50, and palladium rose 0.5% to $1,922.00.
ECONOMIC OUTLOOK
Asia-Pacific markets were mixed on Tuesday as investors struggled to find direction, with attention remain on the inflation as well as likely policy tightening from central banks such as the U.S. Federal Reserve. While the Omicron-led surge in domestic COVID-19 cases denting sentiment further.
Traders have ramped up their rate hike expectations since the Fed's minutes from the December meeting appeared to signal an earlier-than-expected rate rise. A busy week also sees U.S. December consumer inflation data is due to be released on Wednesday, with headline CPI seen coming in at a red-hot 7% on a year-on-year basis, boosting the case for an early increase in interest rates. The season of corporate earnings also kicks off this week with the big U.S. banks reporting from Friday onwards.
Federal Reserve Chair Jerome Powell will appear before the Senate Banking Committee on Tuesday for consideration to a second four-year term as head of the Fed, followed by a hearing with vice chair nominee Lael Brainard on Thursday.
