EQUITIES
Shares in Asia-Pacific traded mostly higher on Tuesday, with Australian stocks leading gains regionally. The S&P/ASX 200 jumped 1.03%. The Nikkei 225 in Japan gained 0.99% while the South Korea’s KOSPI added 0.13%. Over in Southeast Asia, Singapore’s Straits Times index rose 0.76%, and in India, the S&P BSE Sensex rose 0.52%.
Elsewhere, mainland Chinese stocks declined, with the Shanghai composite traded by 0.90% lower, while the Hong Kong’s Hang Seng index declined 0.76%.
Overnight on Wall Street, the Dow Jones Industrial Average fell 0.25%. But the S&P 500 gained 0.18%, and the Nasdaq Composite added 0.74% to close both record highs for the indices.
OIL
Crude oil edged higher on optimism that economic reopening will boost summer demand in the U.S. and Europe, and as the prospect of extra supply coming to the market from Iran faded.
Brent gaining for a fourth consecutive session, traded at $73.08 per barrel, and U.S. crude futures traded at $71.11 per barrel.
Overnight, the Brent closed at $72.86 while WTI ended at $70.88 per barrel.
CURRENCIES
Benchmark U.S. 10-year Treasury yields slipped to hover near a 3-month low. They have dropped from a 1-year high of 1.78% in March. Yields on the 10-year US Treasuries stood at 1.484%.
The dollar index versus major peers were broadly flat at 90.477.
Bitcoin jumped above $40,000 after Elon Musk said Tesla would resume transactions with the cryptocurrency when mining it is done with more clean energy. The currency also got a boost after veteran hedge fund manager Paul Tudor Jones re-endorsed the coin in a television interview.
It last traded at around $40,490. Ether also got a small lift, remained well within recent ranges at $2,600.
GOLD
Gold prices fell for a third straight day on Tuesday, as an uptick in the dollar dented the safe-haven metal’s appeal, while investors awaited the U.S. Fed meeting for further clarity on rising inflation and monetary policy going forward.
The spot gold down to trade at $1,864.70 an ounce and rose to $1,866.70 per ounce for gold futures. Previously closed at $1,865.90 and $1,865.90, respectively.
ECONOMIC OUTLOOK
Asian shares rose on Tuesday, tracking Wall Street higher overnight, while investors also focus on the much-anticipated U.S. Federal Reserve’s two-day policy meeting due to begin later in the day, on the central bank's outlook on inflation and the future of bond purchases.
Investors may focus on technology stocks following overnight gains on the Nasdaq and the S&P 500. High-growth tech-related stocks, which were at the heart of a sell-off driven by fears of rising rates, have regained their footing this month at the expense of economy-linked industrials, financials, and materials stocks.
Some key events to watch today including U.S. industrial production, PPI & retail sales. An EU-U.S. summit meanwhile takes place in Brussels.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 110.227 and 110.425.
- Support line of 109.586 and 109.387.
Commentary/ Reason:
The yen was at 110.075 per dollar, almost flat, after a slide of about 0.7% in the last two sessions brings the yen to a new 1-week low.
The pair gains were capped on the day by the market apprehension ahead of the two-day U.S. FOMC monetary policy meeting starting later today. Traders weighed if inflationary pressure as the economy reopens after the pandemic could force the FOMC into an earlier tapering of stimulus.
Meanwhile for Japan, the BoJ meets for a two-day rate review ending on Friday. The Bank of Japan is likely to extend a September deadline for its pandemic-relief programme at this week's policy meeting, former BoJ board member Makoto Sakurai said earlier today.
In a policy review in March, the BoJ clarified that it would allow 10-year JGB yields to move 50 basis points around its 0% target in the hope of boosting market trading.
USDJPY continues with the 110.227 resistance line in sight after rebounding from the ascending trendline once again. Oscillations continue to in an uptrend with higher highs and higher lows.
