EQUITIES
Shares in Asia-Pacific mostly in green on Monday trade. The mainland Chinese stocks were higher, with the Shanghai composite up about 0.76% while the Hong Kong’s Hang Seng Index rose 0.54%. The Australia’s S&P/ASX 200 edged 0.48% higher, the Singapore’s FTSE Straits Times Index added 0.47%, and the India’s S&P BSE Sensex index advanced 1%.
Elsewhere, the South Korea’s KOSPI slipped -0.50% and in Japan, the Nikkei 225 dipped -0.87%.
OIL
Oil prices were mixed in a tight range on Monday after the recovery of a major U.S. pipeline network eased concerns over supply, though fresh restrictions in Asia amid surging COVID-19 cases weighed on sentiment.
The Brent crude futures traded at $68.70 per barrel, and U.S. crude futures traded at $65.43 per barrel.
On Friday, the Brent closed at $68.71 while WTI ended at $65.37 per barrel.
CURRENCIES
The inflation scares initially saw 10-year Treasury yields reach a 6-week peak just above 1.70%, but the Fed's patience soothed the mood and yields were back to 1.62% on Monday. The dollar tracked the move in yields, bouncing to 90.909 on a basket of currencies before fading away to its current 90.402.
Elon Musk continued to whipsaw the price of Bitcoin, briefly sending it to slide below $45,000, its lowest since February after implying in a Twitter exchange Sunday that Tesla Inc. may sell or has sold its cryptocurrency holdings.
GOLD
Gold prices rose to a 3-month high today as a weaker U.S. dollar and declining bond yields boosted the previous metal’s appeal.
The spot gold rose to trade at $1,855.30 an ounce and fell to $1,853.90 per ounce for gold futures. Previously closed at $1,843.90 and $1,838.10, respectively.
ECONOMIC OUTLOOK
Asian shares were traded cautiously on Monday as investors reacted to the release of Chinese economic data while more evidence of global inflation pressures emerges.
Data on Friday showed U.S. retail sales unexpectedly stalled in April as the boost from stimulus checks faded, but an acceleration is likely in the coming months amid record savings and a reopening economy. The weak retail sales report curbed rising inflation worries and bets over a sooner-than-expected U.S. Federal Reserve rate hike.
China's factories slowed their output growth in April and retail sales significantly missed expectations.
Investors also monitoring the COVID-19 situation in places such as Taiwan, which has seen a recent spike in domestic infections.
Among U.S. corporate earnings due today including Hostess Brands, Lordstown Motors & Tencent Music.
To date, number of confirmed worldwide cases for COVID-19 pandemic has surpassed 163.07 million, recording more than 3.37 million fatality globally.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 109.485 and 109.571.
- Support line of 109.207 and 109.121.
Commentary/ Reason:
The dollar was steady on the yen at 109.332, eased having strengthened last week from levels above 109 against the safe-haven yen.
A dollar bounce that followed higher-than-expected inflation data last week has faded as traders figure the Fed will keep rates low.
The Japanese yen was unable to capitalise on the softer U.S. dollar sentiment as local traders continued looking over their shoulder at the COVID-19 case count ledger.
The USD/JPY has failed to clear the 109.10 support level, despite a spike in bullish momentum towards the close of the trading week last week.
Price action will likely consolidate in the current range. The ascending trendline remains a key support level for the pair. Momentum indicators are bullish, with MACD testing the zero line.
