EQUITIES

 

Asia-Pacific markets were higher on Thursday, except of the Australia’s ASX 200 that edged lower, losing around -0.70%.

In Japan, the Nikkei 225 rose 0.75% while the South Korea’s KOSPI climbed 1.02%. In Hong Kong, the Hang Seng index advanced 1.51% while the Chinese mainland shares, the Shanghai composite was up 0.545%. The Singapore’s Straits Times index gained 1.14%, and the India’s S&P BSE Sensex index traded 0.68% higher.

 

Overnight on Wall Street, the S&P 500 closed at a record high on Wednesday and the Dow Jones Industrial Average closed above 33,000 points for the first time, rose 0.58% to end at 33,015.37 points. The tech-heavy Nasdaq Composite added 0.4%, to 13,525.20.

 

OIL

 

Oil extended declines for a fifth day on Thursday, weighed down by rising U.S. crude inventories and by worries in Europe, where the coronavirus vaccine roll out is faltering after some European countries suspended use of AstraZeneca's COVID-19 vaccine.

The Brent crude futures traded to $67.53 per barrel, while the U.S. crude futures at $64.16 per barrel.

Overnight, the Brent closed at $68.00 for Brent while WTI futures ended at $64.60 per barrel.

 

CURRENCIES

 

The dollar weakened versus most major peers. Last stood at 91.54.

Yields on shorter-dated Treasuries eased as the central bank pushed back on the market’s more aggressive rate-hike projections. The 10- and 30-year benchmarks also subsided from intraday peaks that marked their highest levels in over a year.

The dollar extended declines against commodity currencies and more risk-sensitive currencies, as Fed Chairman Jerome Powell stood pat on its dovish interest rate.

Bitcoin held firm at $58,820, having bounced from Tuesday’s 1-week low.

 

GOLD

 

Gold prices at their highest in more than 2 weeks on after Fed maintained dovish line on interest rates.

Gold spot added to trade at $1,748.40 an ounce, while rose around $1,746.30 per ounce for gold futures. Previously closed at $1,745.60 and $1,727.10, respectively.

 

ECONOMIC OUTLOOK

 

Most Asian stocks and U.S. stock futures rose on Thursday after the U.S. equities and bonds rallied on the Federal Reserve’s commitment to maintain accommodative monetary policy and projected a rapid jump in U.S. economic growth this year as the COVID-19 crisis eases.

Fed Chair Jerome Powell and his colleagues remained dovish at the end of their meeting Wednesday. The U.S. Federal Reserve’s policymaking committee voted to keep short-term borrowing rates near zero in a widely expected move. The Fed also ramped up its expectations for economic growth by 6.5% this year but indicated that there are likely to be no interest rate hikes through 2023.

While later in the day, the Bank of England also to announce their rate decision. BOE is expected to leave monetary policy unchanged at a historic low of 0.1% and its bond-buying programme unchanged at 895 billion pounds.

 

To date, number of confirmed worldwide cases for COVID-19 pandemic has surpassed 121.16 million, recording more than 2.68 million fatality globally.

 

TECHNICAL OUTLOOK

 

[USDJPY]

Important Levels to Watch for Today:

-        Resistance line of 109.365 and 109.616.

-        Support line of 108.556 and 108.306.

Commentary/ Reason:

  1. The dollar edged higher against the Japanese yen to recouped losses after slipped down earlier today. Firmed 0.10% to 108.951 yen.

  2. The yen gave up an early advance following the conclusion of the FOMC meeting, and turned lower as improving risk appetite hurt traditional safe-harbour currencies.

  3. Following the FOMC meeting, the U.S. Federal Reserve’s policymaking committee reiterated their commitment to stay dovish interest rate.

  4. Next, traders focus is turning to the Bank of Japan monetary policy decision and Governor Haruhiko Kuroda briefing Friday. The BoJ is expected to slightly widen an implicit band at which it allows long-term interest rates to move around its 0% target, the Nikkei newspaper reported on Thursday.

  5. At present, the BoJ allows 10-year bond yields to rise and fall 0.2% each around its 0% target. Following the sources, it now will widen that band and tolerate rises and falls of 0.25% each.

  6. Also, Japan to lift Tokyo area state of emergency as planned on Sunday.

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