DAILY MARKET REPORT 23 APRIL
EQUITIES
Shares in Asia-Pacific were mostly lower on Friday trade. Japan’s Nikkei 225 fell -0.75% in afternoon trade, pared losses having fallen more than 1% in the morning. South Korea’s KOSPI traded slightly lower, down -0.04%. Australia’s S&P/ASX 200 slipped -0.09%, the Singapore’s Straits Times index dipped -0.27%, and the India S&P BSE Sensex also tumbled -0.33% as COVID-19 situation in the country remains serious and weigh on sentiment.
Elsewhere, the mainland Chinese stocks nudged higher, with the Shanghai composite rising slightly at 0.05%, while the Hong Kong Hang Seng rose 0.90%.
Overnight on Wall Street, the Dow Jones Industrial Average fell 0.94% to 33,815.9, the S&P 500 lost 0.92% at 4,134.98, and the Nasdaq Composite dropped 0.94% to 13,818.41.
OIL
Oil prices rose on Friday on hopes of a fuel demand recovery in the U.S. and Europe as economic growth picks up and lockdowns ease, though worries about India's second wave of COVID-19 cases kept a lid on gains. The Brent crude futures traded at $65.77 per barrel, and U.S. crude futures traded at $61.86 per barrel.
Nevertheless, both benchmark crude contracts are headed for a weekly loss of nearly 2%.
Overnight, the Brent closed at $65.40 while WTI ended at $61.43 per barrel.
CURRENCIES
U.S. 10-year Treasury yield ticked lower on news that Biden will propose a tax hike for high earners, to fund about $1 trillion in childcare, universal pre-kindergarten education and paid leave for workers. Was last at 1.556%
The dollar index, which tracks the greenback against a basket of currencies of other major trading partners, fell 0.09% to 91.19. Traders contemplate the next moves by major central banks ahead of a U.S. Federal Reserve meeting next week.
Bitcoin prices dropped below the $50,000 level. Last sat at $49,606.
GOLD
Gold gained and set for a third straight weekly rise as a softer U.S. dollar, falling Treasury yields and a dip in equities encouraged investors to flock towards bullion.
The spot gold jumped to trade at $1,784.60 an ounce and rose to $1,785.40 per ounce for gold futures. Previously closed at $1,783.90 and $1,782.00, respectively.
ECONOMIC OUTLOOK
Asian stocks opened slightly easier on the last trading day of the week amid continued COVID-19 jitters and a weaker performance of Wall Street overnight following the President’s tax hike proposal, though ECB’s decision to keep its policy unchanged lifted optimism.
U.S. President Joe Biden proposed to double the capital gains tax for those earning $1 million and above. It was reported that Biden is expected to unveil the proposal formally next week as a move to fund spending in the upcoming American Families Plan.
The number of Americans filing new claims for unemployment benefits fell to a 13-month low last week.
ECB left policy unchanged. The ECB's decision to keep copious stimulus flowing came despite its prediction of a strong rebound in the eurozone economy from mid-year.
To date, number of confirmed worldwide cases for COVID-19 pandemic has surpassed 144.40 million, recording more than 3.06 million fatality globally.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 108.276 and 108.449.
- Support line of 107.716 and 107.543.
Commentary/ Reason:
The dollar was 0.06% lower against the yen at 107.887, close to its 7-week low.
The dollar weakened on news of the proposal of a tax hike for high earners by the President Biden. A decline in T-note yields had impairs the dollar’s interest rate differentials and is negative for the dollar.
Gains in USD/JPY also were limited as a slump in stocks boosted the safe-haven demand for the yen.
The yen meanwhile weighted as the country’s CPI fell at a slower pace in March for an eighth straight month of declines, apart from the news of a state of emergency to be placed at the prefectures of Tokyo, Osaka, Hyogo, and Kyoto to stem the recent surge in Japanese COVID-19 infections.
