EQUITIES
Asia-Pacific markets were lower on Wednesday. The South Korea’s KOSPI led the losses, down -1.07%. The Australia’s ASX 200 down -0.61%, the Nikkei 225 in Japan traded -0.26% lower, and Singapore’s Straits Times index shed -0.12%, while the India’s S&P BSE Sensex index traded flat. The Shanghai composite down -0.31%, and the Hong Kong’s Hang Seng index retreated -0.09%.
Overnight on Wall Street, the Dow Jones Industrial Average fell 0.39%, the S&P 500 lost 0.16% and the Nasdaq Composite added 0.09%.
OIL
Oil slipped as the dollar ticked higher and prospect of economic growth and fuel demand seems to be delayed, after some European countries suspended use of AstraZeneca's COVID-19 vaccine. The Brent crude futures traded to $68.26 per barrel, while the U.S. crude futures at $64.75 per barrel.
Overnight, the Brent closed at $68.39 for Brent while WTI futures ended at $64.80 per barrel.
CURRENCIES
The U.S. dollar gained for the fourth session, supported by elevated benchmark U.S. Treasury yields on expectations of a strong economic recovery after a $1.9 trillion recovery package was signed into a law last week. The index last traded around 91.89.
Treasury 10-year yields fluctuated ahead of the conclusion of the U.S. Federal Reserve's 2-day policy meeting today. The 20-year bond auction drew strong demand.
The U.S. dollar edged up against the commodity currencies such as the Australian and New Zealand dollars as the 2-day Fed meeting kept trading from being volatile.
Bitcoin traded around $55,000, down from a weekend peak above $61,000.
GOLD
Gold prices edged up to hover near their highest in more than 2 weeks on prospects of higher inflation, although the bounce in Treasury yields kept the gains in check.
Gold spot added to trade at $1,737.00 an ounce, while rose around $1,734.90 per ounce for gold futures. Previously closed at $1,731.30 and $1,730.90, respectively.
ECONOMIC OUTLOOK
Asian stocks turned lower on Wednesday, tracking the cautious performance of Wall Street ahead of the conclusion of the U.S. Federal Reserve's policy meeting today and other central bank meetings this week, where regulators will indicate whether they will retain policies supporting a post-pandemic recovery. Benchmark Treasury yields hovered near their highest levels in over a year.
The Fed is expected to announce its decision on interest rates at 1800 GMT on Wednesday. Investors will eye policymakers' remarks on a recent spike in bond yields, fears about rising inflation and the economic outlook.
The Bank of England also meets this week, on Thursday, and the Bank of Japan will wrap up its 2-day meeting on Friday.
The API reported a withered U.S. crude and gasoline stockpiles. The crude inventories dropped by 1.05 million barrels last week, the gasoline inventories dropped by 926,000 barrels, while distillate stockpiles (a category that includes diesel) rose by 904,000 barrels.
To date, number of confirmed worldwide cases for COVID-19 pandemic has surpassed 120.66 million, recording more than 2.67 million fatality globally.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 109.607 and 110.092.
- Support line of 108.637 and 108.152.
Commentary/ Reason:
The dollar reverses overnight losses to turned higher on Wednesday. Though it moves with caution ahead of the central bank meetings.
Against the yen, the greenback firmed 0.12% to 109.121 yen, hovering near 9-month highs hit this week.
The firmer tone for the dollar in the meanwhile, came following the higher T-note yields.
The U.S. economic data also bolstered the progress. U.S. import price data was stronger than expected and supportive for the dollar.
Next, traders are turning their focus to the extensive policy review by the U.S. Fed’s olater today and on the BoJ monetary meetings on Friday this week.
