EQUITIES
Asia-Pacific markets mostly traded lower on Wednesday. Mainland Chinese stocks slipped as the Shanghai composite retreated -0.61% while the Hong Kong’s Hang Seng index down -0.31% lower. The Nikkei 225 in Japan dipped -0.64%, while the Singapore’s Straits Times index shedding -0.07% lower. Elsewhere, the India’s S&P BSE Sensex index declined -0.72%.
Shares in Australia meanwhile bucked the overall trend as the S&P/ASX 200 advanced 1.63% lower, and South Korea’s KOSPI gained 0.10%.
Overnight on Wall Street, the Dow Jones Industrial Average fell 0.31%, to 33,066.96, the S&P 500 lost 0.32%, to 3,958.55 and the Nasdaq Composite dropped 0.11%, to 13,045.39.
European shares advanced to near-record highs on hopes of a vaccine-driven recovery.
OIL
Oil fluctuated ahead of an OPEC+ meeting on Thursday at which the group will decide on its output policy. The Brent crude futures traded to $64.38 per barrel, and the U.S. crude futures at $60.94 per barrel.
Overnight, the Brent closed at $64.14 for Brent while WTI futures ended at $60.55 per barrel.
CURRENCIES
The U.S. 10-year Treasury yields rose to 14-month highs yesterday, buoyed by expectations for a swift and strong U.S. economic recovery. The dollar index held above 93 after surging as overnight. It has climbed from close to 90 at the start of March, on course for its best month since 2016. Now last stood at 93.42.
Currencies were mostly a sea of red against the U.S. dollar on Wednesday on the increasing distribution of U.S. vaccines and President Joe Biden's plans to spend up to $4 trillion on infrastructure. Biden is expected to announce his plan on Wednesday in Pittsburgh, details of which spurred yields higher on concerns the spending could push up the government deficit.
GOLD
Gold slipped below $1,700 per ounce to multi-month lows. The spot gold retreated to trade at $1,679.40 an ounce, while slipped to around $1,679.40 per ounce for gold futures. Previously closed at $1,686.00 for both.
ECONOMIC OUTLOOK
Shares in Asia-Pacific traded marginally lower, remain wary of upward pressure on bond yields, while also in line with the weaker Wall Street performance overnight that weighed on tech shares, though financial stocks rose helped by signs the fallout from the Archegos meltdown would be largely contained.
There were some jitters over news over the soured bets at New York-based Archegos Capital Management, which had left global banks that financed its trades nursing at least $6 billion in losses.
Asian stocks were on track for their first monthly loss since last October as the markets keep retreated on Wednesday. Despite a strong China's factory and services activity that expanded at a faster-than-expected pace in March, it failed to provide lift to the regional markets.
Some key events to watch this week including President Biden’s unveiling his infrastructure program and EIA crude inventory report.
To date, number of confirmed worldwide cases for COVID-19 pandemic has surpassed 128.25 million, recording more than 2.80 million fatality globally.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 110.833 and 111.509.
- Support line of 109.481 and 108.805.
Commentary/ Reason:
The greenback set a fresh 1-year top of 110.963 yen earlier today.
The Japanese yen weakened 0.45% versus the greenback at 110.828 per dollar.
The dollar soared as investors bet that massive fiscal stimulus and aggressive vaccinations will boost the U.S. economic recovery.
The rally in dollar were largely supported by the 10-year T-note yield that rose to a new 14-month high of 1.774%, aside from comments from BOJ Governor Kuroda that stressing the BoJ’s readiness to ease monetary policy “without hesitation” as needed with an eye on developments over the pandemic.
The dollar is on track for a third straight monthly rise against the yen and its biggest since end-2016.
