EQUITIES
Shares in Asia-Pacific were higher on Thursday trade. South Korea’s KOSPI led gains regionally as it rose 1.00% in afternoon trade. In Japan, the Nikkei 225 gained 0.41% while in Australia, the S&P/ASX 200 jumped 0.65% higher. The Singapore’s FTSE Straits Times Index added 0.13%, and the India’s S&P BSE Sensex index rose 0.56%.
Elsewhere, the mainland Chinese stocks, the Shanghai composite edged 0.38% higher, while in Hong Kong, the Hang Seng index bucked the overall market trend, to decline 0.40% lower.
Overnight on Wall Street, the Dow Jones Industrial Average rose 0.07%, to 34,600.38, the S&P 500 gained 0.14%, to 4,208.12 and the Nasdaq Composite added 0.14%, to 13,756.33.
OIL
Oil prices hit the highest level in 1-1/2 years, spurred by the ongoing recovery from COVID-19 in the US, China, and parts of Europe as vaccinations accelerate, prompting more people to travel.
OPEC+ decision to gradually restore supply while the slow pace of nuclear talks between the U.S. and Iran also helped.
The Brent trade at $70, to trade at $71.74 per barrel, and U.S. crude futures traded at $69.22 per barrel.
Overnight, the Brent closed at $71.35 while WTI ended at $68.83 per barrel.
CURRENCIES
The dollar index, which measures the greenback against a basket of major currencies, was flat at 89.979, pulled higher from a 5-month trough of 89.535 touched last week.
10-year U.S. Treasury yields dipped below 1.60%, declined to 1.587% on Thursday.
The commodity-linked currencies such as Canadian dollar and the Norwegian krone rally on the prospect of a recovery in oil demand.
Bitcoin traded at about $38,000, maintaining its advance this week after May’s cryptocurrency rout.
GOLD
An uptick in bond yields weighed on the safe-haven metal while strong U.S. economic data prompted the shift back into riskier assets.
The spot gold declined to trade at $1,904.20 an ounce and slipped to $1,907.10 per ounce for gold futures. Previously closed at $1,908.20 and $1,909.90, respectively.
Palladium was steady at $2,8568.00 per ounce, silver edged 0.18% higher to $27.255, and platinum rose 0.08% to $1,193.60.
ECONOMIC OUTLOOK
Asian stocks traded mixed on Thursday as traders weigh the latest Federal Reserve comments about the need for a discussion regarding stimulus tapering, and as investors weighed inflation concerns ahead of key U.S. economic data.
Philadelphia Fed President Patrick Harker on Wednesday said it is appropriate “to slowly, carefully move back” on bond purchases at the appropriate time.
The Fed’s Beige Book meanwhile indicated the pace of the U.S. recovery picked up somewhat in the past two months, sparking price pressures as businesses contended with worker scarcity and rising costs. The Fed also plans to begin gradually selling a portfolio of corporate debt purchased through an emergency lending facility launched last year.
Investors are also digesting President Joe Biden’s plans to amend a U.S. Trump-era policy ban on investments in companies linked to China’s military, and looking ahead to Friday’s U.S. jobs report for the latest insight into the recovery from the pandemic and inflation risks.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 109.911 and 110.077.
- Support line of 109.375 and 109.209.
Commentary/ Reason:
The Japanese yen traded at 109.729 per dollar, weaker than levels below 109.5 seen against the greenback earlier this week.
The yen was weighted on Japan's services sector activity contracted for the 16th consecutive month in May. The PMI slumped to 46.5 in May.
BoJ comments also weighed on the yen. BoJ board member Adachi on Wednesday said, “if the Fed discusses tapering and yen strengthens, there’s a chance the BoJ will discuss taking action.” Adachi also said that the BoJ must be ready for a long battle to hit its inflation target and must bolster stimulus without hesitation if the economy comes under downward pressure due to external factors.
USD/JPY price action indicates that moderate bullish sentiment remains.
Though sellers are active in the pair, the rally is set to advance. An ascending triangle pattern indicates a bullish breakout will be on the cards as the pair moves closer to the apex.
