EQUITIES

Asia-Pacific markets traded higher on Wednesday. The Japan’s Nikkei 225 gains 0.16%, the Australia’s S&P/ASX 200 up 0.83%, the Shanghai Composite added 0.18%, the Hong Kong’s Hang Seng index added 0.82%, the Singapore’s Straits Times index rose 0.40%, and the South Korea’s KOSPI advanced 0.42% higher. 

Overnight on Wall Street, the Dow Jones Industrial Average rose 1.13% to 30,199.31 points. The S&P 500 gained 1.29% and the Nasdaq Composite climbed 1.25% to 12,595.06, exceeding its previous record close on Dec. 8.

OIL

Oil slips on demand worries. The Brent crude futures traded to $50.64 a barrel, while U.S. crude at $47.55.

On Tuesday, Brent closed at $50.76 per barrel, while WTI futures ended at $47.62 per barrel.

CURRENCIES

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 90.42 after seeing levels above 90.6 earlier in the week.

The Australian dollar was at $0.7554 after trading at levels around $0.751 yesterday. The New Zealand dollar traded at $0.7107 after reaching $0.7120 Monday for the first time since April 2018.

GOLD

Gold edged higher, currently trading at $1,856.80 per ounce, while stands around $1,860.80 per ounce for gold futures. Previously closed at $1,853.80 and $1,855.30, respectively.

Silver trading at $24.64, platinum trading at $1,037.00 and palladium trading at $2,224.00.

ECONOMIC OUTLOOK

Asian stocks traded higher on Wednesday taking its cue from overnight U.S. stocks' strong performance, on fresh optimism over the U.S. stimulus package and rollout of COVID-19 vaccine, looking past tightening lockdowns in Europe and forecasts for a slower-than-expected recovery in fuel demand.

Markets will now look to the U.S. Federal Reserve 2-day meeting for new projections on whether the economy will suffer a double-dip recession or is on the cusp of a vaccine-inspired boom. The central bank is to release a statement later, with a press conference set after.

Optimism over a $1.4 trillion U.S. spending package increased after U.S. congressional leaders reported substantial progress after Speaker Nancy Pelosi invited them to meet late on Tuesday to hammer out a deal to be enacted this week.

IEA report sees crude glut enduring to end-2021 amid demand strains, revised down its estimates for oil demand this year by 50,000 bpd and for next year by 170,000 bpd.

Japan’s exports declined 4.2% in November as compared with a year ago.

To date, number of confirmed worldwide cases for COVID-19 pandemic has surpassed 73.463 million affecting 213 countries and territories around the world and 2 international conveyances, recording more than 1.635 million fatality globally.

TECHNICAL OUTLOOK

[USDJPY]

Important Levels to Watch for Today:

- Resistance line of 104.151 and 104.373.

- Support line of 103.430 and 103.207.

Commentary/ Reason:

- The dollar traded at 103.441 yen, declining 0.22% against the Japanese currency on Wednesday, touched a more than 1-month low on early trade today.

- Comments on Tuesday from Japanese Finance Minister Aso gave the yen a boost when he said he will seek both economic recovery and fiscal health and will look to pass a third extra budget.

- Hence, earlier today, Japan's cabinet approved a third extra budget that adds ¥21.8 trillion ($210 billion) in spending.

- Investors are also keeping an eye on the outcome of a 2-day Fed’s policy meeting on Wednesday. Policymakers are expected to keep the key overnight interest rate pinned near zero and signal it will stay there for years to come, a decision that analysts say will further boost investors’ risk sentiment.