EQUITIES
Shares in Asia-Pacific rose in Monday trade. In Japan, the Nikkei 225 advanced 0.47% while the South Korea’s KOSPI and the S&P/ASX 200 in Australia traded 0.25% higher.
Mainland Chinese stocks nudged higher as the Shanghai composite rose 0.40%, while the Hong Kong’s Hang Seng index traded 0.52% higher.
Other regional stocks also advanced, as the Singapore’s Straits Times index rose 0.81%, and the S&P BSE Sensex in India added 0.99%.
European markets also head for higher open on Monday, reflecting broadly positive trade in global markets.
OIL
Oil prices were steady on Monday, held around its 3-week highs reached earlier in the session as a powerful hurricane ploughing through the Gulf of Mexico forced shutdowns and evacuations of hundreds of offshore oil platforms.
The Brent now traded at $73.47 per barrel, while U.S. crude futures traded at $68.62 per barrel. On Friday last week, the Brent settled at $72.70 a barrel, and the WTI ends at $68.74 per barrel.
CURRENCIES
The dollar loitered around multi-week lows on Monday after Powell indicated on Friday there was no rush to tighten monetary policy. Focus shifts to the U.S. employment report, as markets look for evidence of substantial further progress toward maximum employment.
The dollar index dropped Friday and was little changed on Monday at a 1-week low of 92.662. The yield on benchmark 10-year Treasury notes was 1.310% compared to the last week's high of 1.375%.
GOLD
Gold prices eased below its 3-1/2-week high after U.S. Federal Reserve Chair Jerome Powell stopped short of providing any clear guidance on the timeline for paring economic support at the Jackson Hole economic conference last Friday.
Spot gold was last at $1,815.30 per ounce, paring its peak since Aug. 4 at $1,820.50 earlier today. The U.S. gold futures eased to $1,819.30.
Silver rose slightly to $24.12 per ounce, while platinum climbed 0.13% to $1,007.80. Palladium was 0.58% higher at $2,422.00.
ECONOMIC OUTLOOK
Asian shares started the week with gains after U.S. Federal Reserve Chairman Jerome Powell on Friday struck a more dovish tone at the central bank's long-awaited symposium, although investors remained cautious about prospects in China.
European markets also head for higher open, reflecting broadly positive trade in global markets sentiment.
The U.S. Federal Reserve Chairman Jerome Powell indicated last Friday that the central bank is likely to begin tapering before the end of the year, though there is still “much ground to cover” before rate hikes.
In Asia, Beijing’s regulatory broadside against private industry remains a key focus area. Beijing is reportedly looking at new rules that would restrict domestic internet firms from going public in the U.S., according to the Wall Street Journal. Chinese companies in sectors from tech to property have recently been roiled by a series of regulatory crackdowns, spooking some investors, and pushing the Hong Kong benchmark to 2021 lows earlier this month.
Oil was also in focus after energy firms suspended 1.74 million barrels per day of oil production in the US Gulf of Mexico as Hurricane Ida slammed into the Louisiana coast as a Category 4 storm.
The next big event on traders' calendars is U.S. nonfarm payroll figures for August due to be published Friday, as Powell has suggested an improvement in the labour market is one major remining prerequisite for action. PMIs figures in China and the U.S. through the week, as well as European inflation data, meanwhile will update the picture of the global economy as it faces headwinds from steadily climbing virus cases.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 110.177 and 110.386.
- Support line of 109.498 and 109.289.
Commentary/ Reason:
U.S. dollar nursed losses after U.S. Federal Reserve Chairman Jerome Powell laid out a slower-than-expected path to rate hikes.
The Japanese yen traded at 109.749 against the dollar on Monday, strengthening from last Friday 2-week low at level around 110.264, although back to meandering near the centre of its trading range since early July.
The yen strengthened and USD/JPY gave up most of its earlier gains after T-note yields fell back from their highs. The 10-year T-note yield on Friday fell on dovish comments from Fed Chair Powell, who said the Fed is in no hurry to raise interest rates.
Despite dollar weakness, Japanese yen however struggles to find demand on the domestic COVID-19 situation.
The USD/JPY pair remain directionless and confined to a tight range. Motivation for the price to resume the expected bullish trend for the upcoming period, will targets 110.177 followed by 110.386 levels as initial positive stations.
On the other hand, we should note that breaking 109.49 and holding below it will press on the price to turn to decline.
