EQUITIES
Shares in major Asia-Pacific markets rose in Monday trade, with Japan’s Nikkei soared almost 2% to lead the regional gains. Meanwhile, mainland Chinese stocks recovered from an earlier slip, with the Shanghai composite up 1.54% and the Hong Kong’s Hang Seng index traded 1.10% higher.
Elsewhere, the South Korea’s KOSPI advanced around 0.5%, the S&P BSE Sensex in India added 0.62%, and the S&P/ASX 200 in Australia jumped 1.25%.
The Straits Times index in Singapore bucked the overall trend to trade 0.55% lower.
European stocks are set to open higher, tracking positive sentiment of the day.
OIL
Oil prices fell on Monday on worries over China's economy after a survey showed growth in factory activity slipped sharply in the world's second-largest oil consumer, with concerns compounded by a rise in oil output from OPEC producers, and the risk posed by the spread of the Delta virus variant.
The Brent traded at $74.46 per barrel, and U.S. crude futures traded at $73.19 per barrel.
On Friday last week, the Brent closed at $75.41, while WTI ended at $73.95 per barrel.
CURRENCIES
The dollar held just above a 1-month low on Monday as traders held tight positions heading into a busy week that includes monthly U.S. jobs data and a key Australian central bank decision.
The dollar index, which measures the greenback against six major peers, stood at 92.070. The index dropped 0.9% last week, its worst performance since early May, after Fed Chair Jerome Powell reiterated that rate increases were “a ways away” and the job market still had “some ground to cover.”
The yields on U.S. 10-year notes falling, at 1.226% on Monday.
Bitcoin retreated under $40,000 after climbing over the weekend to the highest levels since May, trading at $39,740. Ether also fell.
GOLD
Spot gold prices edged lower, fell 3.90% to $1,809.90 per ounce. Prices retreated from a 2-week peak in the previous session after the dollar recovered.
ECONOMIC OUTLOOK
Asian shares recouped some of their recent steep losses on Monday as sentiment in the market was lifted by easing concerns over a regulatory crackdown in China. A run of stellar corporate earnings and upbeat economic data in the U.S. and Europe also put a floor under markets.
European stocks also are set to open higher, tracking positive sentiment around the world to begin the month.
There was the prospect of more fiscal stimulus ahead as U.S. senators worked to finalise a sweeping $1 trillion infrastructure plan that could pass this week.
Asia's factories hit a rough patch in July as rising input costs and a new wave of coronavirus infections overshadowed solid global demand, highlighting the fragile nature of the region's recovery. China's factory activity growth slipped sharply in July as demand contracted for the first time in over a year. Indonesia, Vietnam, and Malaysia also saw factory activity shrink in July due to a resurgence in infections and stricter COVID-19 restrictions. Elsewhere, the manufacturing activity rose in export powerhouses Japan and South Korea.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 109.849 and 109.999.
- Support line of 109.549 and 109.339.
Commentary/ Reason:
The dollar was mostly flat at 109.672 yen on Monday.
Investors are monitoring the pandemic situation regionally. More areas in Japan entered a COVID-19 state of emergency on Monday due to a spike in virus cases.
Strength in stocks on Monday meanwhile dampened the liquidity demand for the dollar.
The USD/JPY pair moves narrowly on the first trading day of August following a rebound from Friday's 9-day trough, although rallies have recently been contained. An uptick above 109.84 would encourage for further subsequent headway towards 110.
