EQUITIES
Shares in Asia-Pacific were mixed on thinned Wednesday trade. In Australia, the S&P/ASX 200 edged 0.60% higher, while over in India, the BSE Sensex advanced 0.36%. Hong Kong Hang Seng index traded above the flatline at 0.01%.
The Singapore’s Straits Times index declined -0.85% after the city-state said Tuesday that it will tighten social restrictions after detecting within its borders the COVID-19 variant from India.
Markets in Japan, China and South Korea are closed on Wednesday for holidays.
Overnight on Wall Street, the Dow Jones Industrial Average fell 0.5%, the S&P 500 lost 1.29% and the Nasdaq Composite dropped 2.72%.
OIL
Oil prices rose nearly 1% on Wednesday, extending overnight gains, with Brent crude price has spiked to a near 2-month high after industry data estimated U.S. crude stockpiles fell much more than expected last week reinforcing bullish views on fuel demand in the world's largest economy.
The Brent crude futures traded at $69.40 per barrel, and U.S. crude futures traded at $66.17 per barrel.
Both benchmark contracts rose nearly 2% on Tuesday. The Brent closed at $68.88 while WTI ended at $65.69 per barrel.
CURRENCIES
Talk of rising U.S. interest rates help the dollar recoup a little of its recent losses. Stretched valuations were tested when U.S. Treasury Secretary Janet Yellen said rate hikes may be needed to stop the economy overheating.
Against a basket of currencies, the dollar edged up to 2-week peak, before eased off to 91.20.
The yields on U.S. 10-year notes to ease back to 1.59%, from last week's top of 1.69%, though the market has struggled to break below 1.53%.
Cryptocurrency ether powered to another record peak, nearing US$3,500, before paring gains to trade lower. Bitcoin traded steady, hovered around $54,800.
GOLD
Gold prices edge higher as pullback in U.S. dollar lifts appeal, although gains were kept in check on U.S. Treasury Secretary Yellen rates comments.
The spot gold retreated to trade at $1,781.80 an ounce and slipped to $1,782.30 per ounce for gold futures. Previously closed at $1,779.00 and $1,776.00, respectively.
ECONOMIC OUTLOOK
Asian stocks traded in choppy trading today, as overall investor sentiment remained cautious amid comments from the U.S. Treasury Secretary Janet Yellen on interest rates that rattled markets.
Yellen said interest rates may have to rise to keep a lid on the burgeoning growth of the U.S. economy brought on in part by trillions of dollars in government stimulus spending.
The technology sector regionally is watched for any further pullback following the Nasdaq’s 2.7% overnight decline in Wall Street.
API figures showed US crude stockpiles fell much more than expected last week, fell by 7.7 million barrels in the week ended April 30.
Some key events to watch today including U.S. ADP employment change, PMI figures, and EIA crude oil inventories.
Among U.S. corporate earnings due today including General Motors, MetLife, Zynga, Allstate, Uber, and Rocket Companies.
To date, number of confirmed worldwide cases for COVID-19 pandemic has surpassed 153.96 million, recording more than 3.22 million fatality globally.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 109.568 and 109.751.
- Support line of 108.978 and 108.795.
Commentary/ Reason:
With Asia trade thinned by holidays in Japan and China, further moves were muted, leaving the dollar to drift up slightly, to sit at 109.311 yen on Wednesday.
Strength in T-note yields lifted the USD/JPY.
The yen meanwhile were weighted on concern that pandemic lockdowns might be extended in Japan. Japanese Prime Minister Suga said the government might need to extend the current state of emergency past May 11 for the prefectures of Osaka and Tokyo due to the high number of new COVID-19 cases and pressure on the medical system.
The USD/JPY is making its way back to a recent ceiling at the 110price level. Bullish momentum is currently moderate and unlikely to result in any real challenge to the resistance area. Current trading range may remain intact in the near-term.
