EQUITIES
Shares in Asia-Pacific mostly reverses earlier gains to trade lower on Monday. The Nikkei 225 in Japan slipped 0.96%, while the mainland Chinese stocks, the Shanghai composite edged fractionally lower, down 0.06% while the Hong Kong’s Hang Seng index fell 0.69%. The Australia’s S&P/ASX 200 declined 0.23%, and the Singapore’s FTSE Straits Times Index shed 0.37%.
Elsewhere, the South Korea’s KOSPI gained 0.33%, and the India’s S&P BSE Sensex index added 0.60%.
U.S. markets will be closed for the Memorial Day holiday. U.K. markets will be closed for the Spring Bank holiday.
OIL
Oil prices were firm as expectations of a rebound in global demand outweighed concerns about more supply from Iran once sanctions are lifted.
The Brent crude futures traded at $68.93 per barrel, and U.S. crude futures traded at $66.73 per barrel.
All eyes will be OPEC this week as it reviews its supply agreement, and any hint of an increase in output could pressure prices.
On Friday, the Brent closed at $68.72 while WTI ended at $66.32 per barrel.
CURRENCIES
The 10-year U.S. Treasury yield dropped 2.9 basis points to 1.581%, marking the second straight month of declines after having risen sharply earlier this year on inflation fears. The dollar index stood at 90.053, near a 5-month low.
In cryptocurrencies, Bitcoin fluctuated to trade around $34,645, edging near a 1-week intraday low of $33,425 hit on Sunday. Ether fell more than 2% to $2,333.
Bitcoin was down 40% so far this month, on track for its biggest monthly fall since at least 2011, while ether has lost 17%, having moved in a wide range between $4,380 and $1,730.
GOLD
Gold prices held above the $1,900-level on Monday and were headed for their best monthly jump since July 2020, boosted by a weaker U.S. dollar and lower bond yields, while growing inflationary pressure also lifted demand for the safe-haven metal as a hedge.
The spot gold rose to trade at $1,905.90 an ounce and added to $1,908.70 per ounce for gold futures. Previously closed at $1,903.50 and $1,905.30, respectively.
Palladium rose 0.47% to $2,843.50 per ounce, though set for its first monthly decline in four. Platinum climbed 0.41% to $1,187.20. Silver jumped 0.30% to $28.09 and heading for its best monthly gain since December.
ECONOMIC OUTLOOK
Shares in Asia-Pacific were mixed in Monday trade, as investors reacted to the release of China’s official manufacturing PMI for May and as investors continue to weigh inflation risks and await key U.S. jobs data to gauge the strength of the economic recovery.
China’s official manufacturing PMI for May came in at 51.0, a slight decrease from the previous month’s reading of 51.1.
With key Fed officials now openly acknowledging the need to discuss tapering, further signs of strength in the U.S. economy, could fuel debate about tapering.
The main event of the week will be U.S. payrolls on Friday with median forecasts at 650,000 but the outcome uncertain following April's shockingly weak 266,000 gain.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 110.147 and 110.500.
- Support line of 109.006 and 108.654.
Commentary/ Reason:
The dollar fell back on Monday from a 2-month high recorded Friday and was little changed.
The dollar was last at 109.739 yen, as a dropped T-note yields on inflation fears undercut the dollar.
The yen meanwhile were weighted down as investors adopt a cautious measure when Japanese Prime Minister Suga extended a state of emergency from May 31 to June 20 for Tokyo, Osaka, and seven other prefectures that compromise half of Japan's economy to slow the pandemic.
