EQUITIES
Asia-Pacific stocks were mixed on Wednesday. Hong Kong’s Hang Seng index slipped 0.36% after jumping earlier, with the Nikkei 225 and South Korea’s KOSPI also joined the losses side as it traded 0.11% and 0.39% lower each.
Elsewhere, the Shanghai composite was up 0.34%, the Australia’s &P/ASX 200 rose 0.21%, the Singapore’s Straits Times index advanced 0.06%, and the S&P BSE Sensex in India added 0.34%.
Overnight on Wall Street, all three major U.S. stock indexes advanced higher, with the S&P 500 and the Nasdaq closing at all-time closing highs. The Dow Jones Industrial Average rose 0.09%, to 35,366.26, the S&P 500 gained 0.15%, to 4,486.23 and the Nasdaq Composite added 0.52%, to 15,019.80.
OIL
Oil prices taking a breather on Wednesday after a strong rally this week supported by the FDA full regulatory approval of vaccines for COVID-19, and as Mexico suffered a large production outage due to a fire on its oil platform.
A fire on an oil platform off Mexico on Sunday has cut state-run Pemex's oil production by about 25% since then. Five workers died and the fire halted 421,000 bpd of production.
The Brent now traded at $70.68 per barrel, while U.S. crude futures traded at $67.16 per barrel.
Oil prices rose more than 3% on Tuesday. The Brent settled at $71.05 a barrel, and the WTI ends at $67.54 per barrel.
CURRENCIES
The yield on the benchmark 10-year Treasury notes rose to 1.302%, their highest since Aug.13.
The dollar index, which tracks the currency against six rivals, meanwhile was little changed at 93.021, after dipping to 92.804 the previous day for the first time since Aug. 17.
The improved risk sentiment kept the dollar under pressure, lifting commodity-linked currencies like the Australian and New Zealand dollars.
GOLD
Safe haven gold fell in tandem with the broad increase in risk appetite, with the spot price dropping 0.54% to $1,793.30 per ounce. U.S. gold futures were down 0.68% to $1,796.20.
Silver fell 0.79% to $23.70 per ounce, while platinum edged 1.25% lower to $997.50. Palladium was steady at $2,441.00.
ECONOMIC OUTLOOK
Asian shares were mixed on Wednesday, as investors continue to fret over spiking COVID-19 infections caused by the highly contagious Delta variant, but the full approval by the U.S. FDA granted to the Pfizer Inc COVID-19 vaccine, raising hopes inoculations could accelerate. The absence of negative catalysts also kept risk appetite alive ahead of the much-anticipated Jackson Hole Symposium.
Fed Chair Jerome Powell is due to meet with other world bank leaders when the Jackson Hole Symposium convenes tomorrow, and his remarks will be closely parsed for any clues regarding the Fed's tapering of asset purchases and hiking key interest rates.
Data from trade group the API showed crude inventories fell 1.6 million barrels, while gasoline stockpiles fell 1 million barrels. Official data from the EIA is due to be released on Wednesday at 10:30 a.m. ET.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 109.974 and 110.165.
- Support line of 109.353 and 109.161.
Commentary/ Reason:
The dollar edged up 0.13% to 109.750 yen, another safe-haven currency, but remained around the middle of the trading range since July.
U.S. Treasury yields advanced, limiting the downside for greenback, with the yield on the 10-year note up to a fresh weekly high, helped by the full approval of the Pfizer vaccine in the U.S. At the same time, speculative interest keeps pricing in a delay in U.S. tapering amid stagnant growth data.
The USD/JPY pair has been ranging between key support and resistance levels, as a better market’s mood offsets demand for the safe-haven dollar and yen.
If the USD/JPY starts a surge, it would immediately face the resistance of the 109.970 level, and 110.16 could once again provide resistance as can be seen before.
In the case of a decline, the rate could find support in the 109.35 and 109.16 level, which provided the rate with support throughout the prior week.
