EQUITIES
Shares in Asia-Pacific traded mostly higher on Wednesday, with exception of the S&P/ASX 200 in Australia that bucked the overall trend, to trade 0.35% lower.
Mainland Chinese stocks advanced, with the Shanghai composite added 0.37% and the Hong Kong’s Hang Seng index rose 0.93%.
The Nikkei 225 in Japan gained 0.11%, South Korea’s KOSPI advanced 0.44%, the Singapore’s Straits Times index added 0.38%, and the S&P BSE Sensex in India sat just above the flatline, 0.03% higher.
Overnight on Wall Street, the Dow Jones Industrial Average rose 0.2% to end at 33,945.58, while the S&P 500 gained 0.51% to 4,246.44. The Nasdaq Composite climbed 0.79% to 14,253.27.
OIL
Crude oil prices rose on optimism over the pace of global COVID-19 vaccinations and reopening confidence, although were weighted as OPEC+ begins discussions on raising oil production.
The Brent traded at $75.23 per barrel, and U.S. crude futures traded at $73.08 per barrel.
Overnight, the Brent closed at $74.81, while WTI ended at $73.06 per barrel.
CURRENCIES
Indecisive bond markets were stuck flip-flopping on inflation and interest rate moves. The benchmark 10-year Treasury yields edged lower to 1.463%, compared from as high as 1.594% a week ago.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 91.848 following an earlier low of 91.719.
Bitcoin steadied but struggles to climb away from a 2-week low touched a day earlier when China's central bank reaffirmed a crackdown on cryptocurrencies and restricted trading channels for Chinese residents. A heavy selling drove bitcoin to its lowest since early January - although it has since recovered back above $30,000.
GOLD
Gold prices gained on Wednesday following Fed’s Powell testimonial reassurance, although an uptick in the dollar kept prices in check.
The spot gold advanced at $1,782.50 an ounce and jumped to $1,782.30 per ounce for gold futures. Previously closed at $1,778.80 and $1,777.40, respectively.
Silver gained 0.67% at $26.03 per ounce, palladium eased 0.1% to $2,556.50. Platinum climbed 0.9% to $1,080.
ECONOMIC OUTLOOK
Global shares found a footing on Wednesday, with testimony from U.S. Federal Reserve chair Jerome Powell providing investors with reassurance that the central bank has an eye on inflation but is not hastening to hike rates.
The Congressional testimony from Powell reaffirmed the U.S. central bank's intent to encourage a "broad and inclusive" recovery of the job market and not to raise interest rates too quickly based only on the fear of coming inflation.
Several other Fed speakers are due to appear later today, and their comments may add to a growing sense among traders that September's Fed meeting may bring the announcement of the beginning of the end of stimulus later in the year.
Japan's factory activity expanded at the slowest pace in four months in June. The next PMI figures are also due in Europe and the U.S. and will be watched as markets try to get a sense of the breadth of the economic strength behind rising prices.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 110.918 and 111.152.
- Support line of 110.160 and 109.926.
Commentary/ Reason:
The dollar against the yen touched its highest in a month earlier today at 110.851 yen, before eased back to 110.778 yen, though still 0.15% up on the day.
The Japanese yen was weakened after the country’s PMI expanded at the slowest pace in four months in June, in a sign momentum in the world's third-largest economy was levelling out before Tokyo is set to host the Olympic Games next month.
The yen also weakened as the Japan’s Nikkei Stock index continue its rally today, which reduced the safe-haven demand for the yen.
USD/JPY continues to oscillate within the pattern of an ascending triangle where typically, a bullish breakout can be anticipated.
