EQUITIES
Shares in Asia-Pacific were mixed on Thursday. Over in Hong Kong, the Hang Seng index advanced 0.08%. In Japan, the Nikkei 225 gained 0.10%, South Korea’s KOSPI advanced 0.39%, the Singapore’s Straits Times index added 0.25%, and the S&P BSE Sensex in India added 0.51%.
Elsewhere, the mainland Chinese stocks slipped, with the Shanghai composite down 0.15% while the S&P/ASX 200 in Australia dipped 0.09%.
Overnight on Wall Street, the Dow Jones Industrial Average fell 0.21% to end at 33,874.24 points, while the S&P 500 lost 0.11% to 4,241.84, to end its two-day winning streak. The Nasdaq Composite climbed 0.13% to 14,271.73.
OIL
Oil prices rose on Wednesday, with Brent climbing above $76 a barrel to its highest since late 2018, after data showed U.S. crude inventories declined.
The Brent now traded at $75.28 per barrel, and U.S. crude futures traded at $73.15 per barrel.
Overnight, the Brent closed at $75.19, while WTI ended at $73.08 per barrel.
CURRENCIES
The U.S. dollar held below an 11-week high as investors reassessed U.S. Federal Reserve statements on inflation and looked to upcoming data for direction. The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 91.833 after an earlier recovery from below 91.7.
Ten-year Treasury yields inched higher but remained below 1.5% in muted trading. The 10-year U.S. Treasury yield stood at 1.487%.
Bitcoin rose around 2.1%, giving back some of the day's steeper gains. The cryptocurrency dropped to as low as $28,600 on Tuesday - its lowest since January. Ether gained 3.3%.
GOLD
Gold retreated on Thursday, as dollar firms after comments from Fed officials raised fears of a sooner-than-expected interest rate hike in the U.S.
The spot gold declined at $1,774.90 an ounce and slipped to $1,774.90 per ounce for gold futures. Previously closed at $1,778.30 and $1,783.40, respectively.
ECONOMIC OUTLOOK
Global shares struggled for direction in Thursday trade as traders attempted to navigate conflicting signals from Federal Reserve officials on the timing of a withdrawal of monetary stimulus, and as the S&P 500 on Wall Street snapped its two-day winning streak overnight.
Investors tracking for hints after two Fed officials on Wednesday said that a period of high inflation in the U.S. could last longer than anticipated, a day after Fed Chair Jerome Powell played down rising price pressures.
Data firm IHS Markit said its flash U.S. manufacturing PMI rose to a reading of 62.6 this month, beating estimates of 61.5. U.S. new home sales tumble to 1-year low, as the price soared amid expensive raw materials. New home sales dropped 5.9% to a seasonally adjusted annual rate of 769,000 units last month, the lowest level since May 2020.
U.S. crude and gasoline stocks fell sharply last week, with demand continuing to grow, the U.S. EIA said on Wednesday. The U.S. crude inventories fell by 7.6 million barrels last week to 459.1 million barrels, their lowest since March 2020 U.S. gasoline stocks fell by 2.9 million barrels in the week.
Investors today will keep an eye on the U.S. GPD and the latest reading on jobless claims, as well as the BoE’s interest rate decision and ECB general council meeting.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 111.215 and 111.405.
- Support line of 110.602 and 110.413.
Commentary/ Reason:
Against the Japanese yen, the dollar climbed as far as 111.109, a 15-month high earlier today and now last bought at 110.971.
The yen is under pressure from divergent monetary policies with expectations that the Fed will tighten monetary policy before the BoJ.
The minutes of the April BoJ policy meeting were released Wednesday and were bearish for the yen. The minutes showed policymakers said there was a need to enhance easing during the expected recovery period and that policymakers should proceed with discussions on whether to extend pandemic-support programs.
A higher T-note yields on Thursday also undercut the yen.
