EQUITIES
Markets in Asia-Pacific jumped on Wednesday, with shares in Japan and Hong Kong leading gains throughout the region. Buoyed by tech stocks, the Hong Kong’s Hang Seng index jumped more than 2%, while Japan’s Nikkei 225 advanced 1.83%.
South Korea’s KOSPI rose 1.39%, Australia’s ASX 200 gained 0.64%, and the FTSE Straits Times Index traded 0.12% higher. Mainland Chinese markets also rose, as the Shanghai composite was up 0.35%.
Overnight on Wall Street, the tech-heavy Nasdaq Composite gained 1.41% to 15,153.45, snapped a four-day losing streak. The S&P 500 rose 0.92% to 4,713.07, while the Dow Jones Industrial Average added 0.51%, to close at 36,252.02.
OIL
Oil prices hold overnight gains on Wednesday, supported by tight supply and hopes that the spread of the Omicron variant would not derail a global demand recovery.
The U.S. Federal Reserve chief on Tuesday signalled the central bank may raise rates more slowly than expected, which support oil demand in the near term.
Data from the American Petroleum Institute industry, however, gave a weaker picture on fuel demand, with a smaller decline in crude stockpiles than expected and bigger builds than expected in gasoline and distillate inventories.
The Brent now traded at $83.59 per barrel, and U.S. crude futures traded at $81.23 per barrel.
It soared more than 3% on Tuesday, with the Brent futures ends at $83.72 a barrel, while the WTI crude oil prices closed to $81.22 per barrel.
CURRENCIES
The dollar slid to a six-week low of 95.550 on Wednesday, after Federal Chair Jerome Powell said it may take several months to decide on running down the central bank's $9 trillion balance sheet.
In the bond market, benchmark 10-year Treasury yields were steady at 1.739%, having pulled back from an almost two-year high above 1.8% hit on Monday.
Commodity-linked currencies like the Australian dollar stabilized after jumping alongside oil prices.
Stronger risk appetites also supported bitcoin, which rose to $42,696, after dropping below $40,000 overnight for the first time since September.
GOLD
The weaker dollar benefited bullion, though still hemmed in a range it has kept for half a year. Spot gold added 1.2% to $1,822.75 an ounce. U.S. gold futures gained 1.34% to $1,822.50 an ounce.
ECONOMIC OUTLOOK
Asian stocks and commodities rose in relief after Federal Reserve Chair Jerome Powell sounded less hawkish than expected in testimony to Congress, as he charts a path out of pandemic policy settings.
Federal Reserve Chair Jerome Powell, in a congressional hearing that pointed to his likely confirmation for a second term in the job told that the economy could handle the COVID-19 surge and tighter monetary policy, determined to ensure high inflation did not become "entrenched." Though he did not go into any new details beyond what traders already gleaned from the minutes of last months' Fed meeting and that turned out to be enough to staunch selling in the Treasury market and U.S. tech stocks.
The next focus for traders is Wednesday’s U.S. CPI print that is expected to show unrelenting price pressure. Earlier today, China’s CPI was up 1.5% in December compared to a year ago, a drop from the 2.3% increase in November and lower than the 1.8% rise expected.
Also on investor watchlists for this week is the unofficial start of the Q4 earnings season on Friday, with big banks expected to show an uptick in quarterly core revenue thanks to new lending and firming Treasury yields.
