EQUITIES
Markets in the Asia-Pacific mostly traded higher on Thursday, driven by mild buying interest as investors awaited more clarity on the Federal Reserve’s fight against inflation.
Japan’s Nikkei 225 was 0.57% higher while the Australia’s S&P/ASX was up by 0.96%. In South Korea, the KOSPI rose 0.94% as the Bank of Korea raised its interest rate.
In mainland China, the Shanghai Composite was up 0.41%. Hong Kong’s morning session was cancelled due to the issuance of a typhoon warning.
Overnight on Wall Street, stocks rose, snapping a three-day slide in the Dow and the S&P 500. The Dow Jones Industrial Average closed up 0.18%, the S&P 500 gained 0.29%, and the Nasdaq Composite advanced 0.41%.
OIL
Oil prices slipped in volatile trading, as traders are cautions on mounting supply tightness concerns amid disruptions to Russian exports, the potential for major producers to cut output, and the partial shutdown of a U.S. refinery.
Brent crude was down 0.06%, to $101.68 a barrel, while U.S. West Texas Intermediate crude slipped 0.05%, at $95.31 a barrel.
Both crude oil benchmark contracts touched three-week highs on Wednesday after the Saudi energy minister flagged the possibility that the OPEC+ will cut production to support prices.
Though any cuts by OPEC+ are likely to coincide with a return of Iranian oil to the market, should Tehran secure a nuclear deal with world powers.
Talks between the EU, the U.S. and Iran to revive the 2015 nuclear deal are continuing with Iran saying it had received a response from the U.S. to the EU's "final" text to resurrect the agreement.
In the United States, the world's biggest oil consumer, BP reported shutting some units its Whiting, Indiana, refinery after an electrical fire on Wednesday. The 430,000-bpd plant is a key supplier of fuels to the central U.S. and the city of Chicago.
Falling U.S. crude and product stockpiles also added to the upward pressure on prices. Oil inventories fell by 3.3 million barrels in the week to Aug. 19 at 421.7 million barrels, steeper than analysts' expectations for a 933,000-barrel drop. The bullish impact was countered by a drawdown in gasoline inventories that was less than expected, reflecting tepid demand. U.S. gasoline stocks fell by 27,000 barrels in the week to 215.6 million barrels, compared with earlier expectations for a 1.5-million-barrel drop.
CURRENCIES
The dollar index eased 0.30% to 108.275 but remained not far from its two-decade peak at 109.29, touched in mid-July. Expectations of a hawkish message from FOMC Chair Powell at Jackson Hole will likely keep upward pressure on the greenback in the run‑up to his speech on Friday.
The yield on benchmark 10-year Treasury notes was at 3.104% compared with its U.S. close of 3.106% on Wednesday. The two-year yield, which rises with traders' expectations of higher Fed fund rates, touched 3.402% compared with a U.S. close of 3.386%.
The Bank of Korea (BOK) raised its key interest rate by a quarter-percentage point, in line with expectations.
GOLD
Gold edged higher as the market weighs the outlook for monetary policy ahead of the annual gather of central bankers at Jackson Hole. The weakening economic activity induced some haven buying in the precious metals, snapping six days of declines.
Spot gold rose 0.35% at $1,757.70 per ounce, while the U.S. gold futures added 0.50% to $1,770.10.
ECONOMIC OUTLOOK
Asian share markets were broadly positive on Thursday, with investors nervously awaiting the U.S. Federal Reserve's annual Jackson Hole conference for clues on how sharp future interest rate hikes might be.
Growing concerns of an aggressive stance by the Fed, an energy crisis in Europe, and signs of an economic slowdown in China continue to cause waves of uncertainties.
Investors are now focused on the Jackson Hole symposium that begins on Thursday, with remarks from Fed Chair Jerome Powell Friday potentially providing clues about the pace of future rate hikes, and whether the central bank can achieve a "soft landing" for the economy.
