EQUITIES
Shares in Asia-Pacific declined in Thursday trade. Hong Kong’s Hang Seng index led losses regionally as it declined 1.70%. The South Korea’s KOSPI slipped 1.14%, the Nikkei 225 in Japan shed 0.24%, and in Australia, the S&P/ASX 200 was down 0.97%.
In mainland China, the Shanghai Composite bucked the overall trend as it edged 0.11% higher. The major Chinese city of Shanghai reopened on Wednesday following weeks of stringent COVID-related lockdowns.
Overnight on Wall Street, all three main indexes ended lower, driven by stocks in the financials, healthcare, technology, and consumer discretionary sectors. The Dow Jones Industrial Average fell 0.54% to 32,813.23, the S&P 500 lost 0.75% to 4,101.23 and the Nasdaq Composite dropped 0.72% to 11,994.46.
OIL
Oil prices fell on Thursday as investors take profits ahead of OPEC+ meeting, along with some speculation that Saudi Arabia may boost oil production in response to urging by the U.S.
Investors cashed in on a recent rally with a key producer meeting later in the day set to pave the way for expected output increases. OPEC+ is set to stick this week to its monthly modest oil output increases despite seeing tighter global markets, five OPEC+ sources said on Wednesday, as the group fast approaches its maximum production capacity.
Financial Times meanwhile reported Saudi Arabia is ready to pump more oil in the event of a sharp drop in Russia's output. That comes after European Union leaders agreed earlier this week to ban most Russian crude imports by the end of the year.
EU leaders agreed in principle to cut 90% of oil imports from Russia by the end of this year, the bloc's toughest sanction yet on Moscow since the invasion of Ukraine three months ago. Once fully adopted, sanctions on crude will be phased in over six months and on refined products over eight months. The embargo exempts pipeline oil from Russia as a concession to Hungary and two other landlocked Central European states.
The international benchmark Brent crude futures down 1.60% to $114.04 per barrel. U.S. crude futures dropped 1.63% to $112.92 per barrel. Both crude benchmarks had earlier declined more than 2% each.
CURRENCIES
The U.S. dollar index on the front foot at 102.492 after a recent jump from below 102.
U.S. Treasury yields eased in choppy trading. The U.S. benchmark 10-year yield hit a two-week high of 2.951% on Wednesday and was a touch softer at 2.922% on Thursday. Yields have been rising as the U.S. Fed has raised interest rates quickly to bring red-hot inflation under control while hoping to avoid pushing the economy into a recession.
Bitcoin was trading around $29,825, having fallen overnight, unable to sustain its push above $30,000 earlier in the week.
GOLD
Gold prices was flat as it inched up from a two-week low, supported by worries over rising inflation, although a stronger dollar and rising U.S. yields kept gains in check.
Spot gold was steady at $1,847.90 per ounce. U.S. gold futures were up 0.14% to $1,851.20.
Spot silver was flat at $21.80 per ounce, while platinum fell 0.7% to $990, and palladium rose 0.4% to $2,005.50.
ECONOMIC OUTLOOK
Asian equity markets slipped on Thursday, as concern over high inflation and the threat of recession worries drag down shares.
Investors' worries over inflation and recession have festered amid uncertainty caused by the U.S. Federal Reserve's pace of interest rate hikes, the impact of the Russia-Ukraine war on food and commodity prices, and supply chain constraints exacerbated by strict COVID-19 curbs in China.
Oil prices slumped following a report of reassurances from Saudi Arabia over production, and ahead of OPEC+ meeting, which is expected to pave the way for output increases. A volatile oil market also keeps soaring inflation in focus.
U.S. wheat futures edge higher on Thursday, recouping losses to after a sharp decline in the previous session as the market gauged the impact of diplomatic talks to unblock Ukrainian ports. Corn and soybeans meanwhile ticked lower.
Talks of Russia opening Black Sea shipping channels to Ukrainian grain vessels have pressured wheat prices this week, although the market remains nervous about the possibility of increased grain exports from the region.
U.S. job openings fell in April, but remained at significantly high levels, suggesting that wages would continue to rise as companies scramble for workers, and contribute to inflation staying uncomfortably high for a while. Traders will be next looking to more U.S. employment data due later today and to Friday's U.S. payroll data.
They are also starting to turn their minds towards next week's ECB policy meeting, in which the central bank is expected to give more details of its plans for rate increases.
