EQUITIES
Asia-Pacific markets reversed earlier gains on Tuesday, weighed by Chinese markets.
Mainland Chinese stocks dipped as the Shanghai composite shed -1.19% while the Shenzhen component declined -0.28%, and Hong Kong’s Hang Seng index fell -1.18%. In Japan, the Nikkei 225 edged 0.12% lower while the South Korea’s KOSPI declined -0.33%. The Australian ASX 200 slipped fractionally, down -0.05%.
The Singapore’s Straits Times index gained 0.24%, and the India’s S&P BSE Sensex index rose 0.30%.
Overnight on Wall Street, the Dow Jones Industrial Average closed up 103.23 points, or 0.32%, at 32,731.2. The S&P 500 gained 27.49 points, or 0.70%, to 3,940.59 and the Nasdaq Composite added 162.31 points, or 1.23%, to 13,377.54.
OIL
Oil slipped on concerns about the near-term demand outlook. Fuel consumption is facing a setback after some countries in Europe extended or reimposed lockdowns, while in the U.S., New York City’s mayor urged a pause on reopening.
The Brent crude futures traded to $64.04 per barrel, while the U.S. crude futures at $61.47 per barrel.
Overnight, the Brent closed at $64.62 for Brent while WTI futures ended at $61.55 per barrel.
CURRENCIES
Bond yields dipped ahead of a series of closely watched auctions this week. The U.S. dollar generally weaker, with the index, which tracks the greenback against a basket of its peers, was at 91.83 — still above levels below 91.5 seen last week.
The 10-year Treasury yield declined to around 1.68%, following a 14-month high touched last week.
The Turkish lira showed some sign of stability following a 7.5% dive on Monday.
Bitcoin stood at $54,355, having fallen almost 5% on Monday to trade near last week’s low of $53,221.
GOLD
Spot gold slipped to trade at $1,736.60 an ounce, while shed to around $1,735.70 per ounce for gold futures. Previously closed at $1,739.30 and $1,738.10, respectively.
ECONOMIC OUTLOOK
Asian markets were mixed on Tuesday opening amid declining bond yields and cautious investors as economic powerhouse (the US, the UK, the EU, and Canada) imposed sanctions against China due to human rights concerns.
China has been sanctioned over alleged human rights abuses against Uyghur Muslims in Xinjiang, drawing an immediate reaction from Beijing.
Technology stocks in Asia-Pacific were watched by investors after their counterparts stateside rallied overnight amid declining bond yields.
Some key events today:
Fed Chairman Jerome Powell and Treasury Secretary Janet Yellen are expected to make their first joint appearance before the U.S. House Financial Services committee to testify on Fed and Treasury pandemic policies.
The U.S. Treasury holds auctions of 2-, 5- and 7-year debt.
U.S. crude stockpile data from the American Petroleum Institute will be released later.
To date, number of confirmed worldwide cases for COVID-19 pandemic has surpassed 123.63 million, recording more than 2.72 million fatality globally.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 109.140 and 109.506.
- Support line of 108.408 and 108.042.
Commentary/ Reason:
The dollar traded 0.10% lower at 108.731 yen, hovering around its weekly low recorded yesterday.
A more that 2% plunge in Japan’s Nikkei Stock Index on yesterday and today prompted increased safe-haven demand for the yen.
A lower T-note yields also weighed on the dollar as the 10-year T-note yield fell to 1.68%, down from last Thursday’s 13-month high of 1.75%.
Investors now await a closely watched Congressional appearance by U.S. Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen later in the day.
