EQUITIES
Asia-Pacific markets were mostly higher on Thursday. In Japan, the Nikkei 225 rose 1.19%, while over in South Korea and Australia, the KOSPI and ASX 200 added 0.22%, and 0.17%, respectively. Mainland Chinese stocks reverses earlier losses, with the Shanghai composite at 0.24% higher while the Hang Seng index in Hong Kong rose 0.26%. The Singapore’s Straits Times index nudged higher, at 0.38%, while the India’s S&P BSE Sensex index slipped -1.28%.
Overnight on Wall Street, the Dow Jones Industrial Average fell 3.09 points, or 0.01%, to 32,420.06. The S&P 500 lost 21.38 points, or 0.55%, to 3,889.14 and the Nasdaq Composite dropped 265.81 points, or 2.01%, to 12,961.89.
OIL
Oil prices edged lower, weighted by the lockdowns in Europe and a build in U.S. crude inventories that curbed risk appetite and raised oversupply fears, while the Suez Canal, a vital shipping lane still blocked by a ship aground since yesterday.
The Brent crude futures traded to $63.54 per barrel, while the U.S. crude futures at $60.19 per barrel.
Overnight, the Brent closed at $64.41 for Brent while WTI futures ended at $61.18 per barrel, slipped around 6% for both benchmarks.
CURRENCIES
The gauge of the dollar against six major peers hovered just below a 4-month high of 92.617 reached overnight, last at 92.56.
U.S. Treasury yields dipped after the Treasury saw average demand for an auction of 5-year notes, with the market appearing to stabilize after benchmark yields reached 1-year highs last week.
Bitcoin continued to swing widely, fluctuating around $52,200. That is after briefly topping $57,000 overnight after Tesla Inc CEO, Elon Musk said customers can now buy the company’s electric cars with the digital token.
GOLD
Gold prices were steady on Thursday as support from easing U.S. Treasury yields was offset by a strong dollar, which emerged as a preferred safe haven amid growing concerns about extended lockdowns in Europe.
Safe haven gold rose around 1%, to trade at $1,735.30 an ounce, while added to around $1,734.40 per ounce for gold futures. Previously closed at $1,734.30 and $1,733.30, respectively.
ECONOMIC OUTLOOK
Asian markets to trade mixed on Thursday after global equities dipped, and U.S. investors considered which stock market sectors would most benefit from strengthening growth and declining Treasury yield. Concerns about extended economic lockdowns in Europe and potential U.S. tax hikes also weighed on investor sentiment.
Technology stocks in the Asian region are monitored after the sector sold off overnight stateside. Among the stocks that declined in the morning today including the Xiaomi, Baidu, Tencent, Softbank Group, and South Korean chipmaker SK Hynix.
On Fed Chair Jerome Powell and Treasury Secretary Janet Yellen testimonial remarks before the Senate Banking Panel, the top two U.S. economic officials mirrored what they told Congress the day before, offered an optimistic outlook for the economy, fuelled by expectations for continued progress due to vaccine rollouts and the $1.9 trillion of federal relief spending.
To date, number of confirmed worldwide cases for COVID-19 pandemic has surpassed 124.72 million, recording more than 2.74 million fatality globally.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 109.256 and 109.793.
- Support line of 108.182 and 107.645.
Commentary/ Reason:
The dollar gained 0.2% to 108.930 yen, as the pair continued to consolidate below 109.
At the same time, the dollar’s rally showed some signs of fatigue, as some of its bruised rivals recovered from lows amid gains in many Asian equity markets.
USD/JPY moved moderately higher as the yen weakened on dovish comments from BOJ Governor Kuroda, who said the BoJ needs to pay close attention to Japan’s financial system because monetary easing is expected to continue for a long while.
USD/JPY also found support on lower Japanese government bond yields that were negative for the yen. The 10-year Japan JGB bond yield fell to a 5-week low of 0.065%, while the U.S. T-note yields found strength.
The reduced inflation concerns at the Congressional testimony by the Fed Chair and Treasury Secretary also fuelled the dollar strength.
