EQUITIES
Asia-Pacific stocks were mixed on Wednesday trade. In Australia, the S&P/ASX 200 led gains among the region’s major markets as it rose more than 1%. The Nikkei 225 in Japan added 0.55% in afternoon trade while the Shanghai composite in mainland China gained 0.60%. The Singapore’s Straits Times index traded above the flatline.
Elsewhere, South Korea’s KOSPI lagged as it slipped 0.40%, while In Hong Kong, the Hang Seng index slipped 0.37%, and the S&P BSE Sensex in India shed 0.68%.
Overnight on Wall Street, the Dow Jones Industrial Average rose 549.95 points to 34,511.99, the S&P 500 gained 1.52%, to 4,323.06 and the Nasdaq Composite added 1.57%, to 14,498.88.
European stocks are expected to open higher later today, tracking positive momentum in the U.S.
OIL
Oil prices resumed falls after a slight rebound overnight, with the Brent traded at $68.81 per barrel, and U.S. crude futures traded at $66.85 per barrel.
Overnight, the Brent closed at $69.35, while WTI ended at $67.42 per barrel.
CURRENCIES
Yields on 10-year Treasuries bounced off 4-month lows to 1.224% from the previous day's close of 1.209%.
Also pointing to persistent worries around the impact of a surge in global COVID-19 infections, the dollar held near a 3-1/2-month peak against its rivals, at 93.029 on Wednesday.
Bitcoin slides below $30,000 level for the first time in about a month.
GOLD
Gold prices slipped on Wednesday, following a buoyant dollar and a rebound in U.S. Treasury yields.
The spot gold slipped to $1,808.80 an ounce and declined to $1,808.40 per ounce for gold futures. Previously closed at $1,809.90 and $1,811.40, respectively.
Silver was steady at $24.90 per ounce, palladium rose 0.4% to $2,651.00, and platinum eased to $1,065.00.
ECONOMIC OUTLOOK
Asian shares and U.S. Treasury yields rose on Wednesday, following an overnight bounce on Wall Street that clawing back some of the week's losses as investors reassessed economic worries, and the dollar was firm on concerns over the impact of a fast-spreading coronavirus variant.
Wall Street rebounded on Tuesday as upbeat earnings reports and revived economic optimism buoyed appetite for risk, following a multi-day losing streak driven by a rise in worldwide coronavirus cases and rising deaths in the U.S.
With a light data calendar on Wednesday, traders are looking ahead to the European Central Bank meeting on Thursday. A dovish tone is expected after President Christine Lagarde foreshadowed a guidance tweak during an interview last week. The ECB announced a new strategy which allows the bank to tolerate inflation above its 2% target and Lagarde said policy guidance would be revisited to demonstrate the bank's commitment to the new goal.
Focus is now on earnings reports from companies such as Netflix Inc and Chipotle Mexican Grill due later in the day.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 110.128 and 110.379.
- Support line of 109.316 and 109.065.
Commentary/ Reason:
The dollar rose slightly against the safe-haven Japanese currency to buy 109.882 yen, after dropping to as low as 109.064 yen earlier of the week when fresh concerns about new coronavirus cases globally drove investors into safer assets.
Delta variant virus infections continue to drag on Asian currencies other than the yen as new lockdowns have been enforced from Seoul to Sydney. Concerns that the event could worsen Japan’s COVID-19 outbreak and lead to political instability have also weighed on the market.
In the BoJ’s June minutes today, policymakers warned of the country’s inflation, pushed by the rising global commodity costs.
The yen also weighted as Japanese shares snapped a 5-day losing streak, while the rebound in U.S. T-note yields meanwhile sparked some strength in the dollar.
The USD/JPY pair is beginning to rebound from the support level following the lead of government bond yields. Buyers remain active and the pair may trace the trendline higher. Momentum indicators have flattened in neutral territory. RSI consolidates around midline, reflecting the absence of buying interest.
