EQUITIES
Shares in Asia-Pacific were mixed in Friday trade. The Shanghai composite declined 0.59%, while the Australia’s S&P/ASX 200 falling 0.80%.
Elsewhere, the benchmark Hang Seng index in Hong Kong rose 0.51%, the Nikkei 225 in Japan climbed 0.59%, the South Korea’s KOSPI added 0.29%, and the S&P BSE Sensex in India gained 0.59%. The Straits Times index in Singapore marginally changed.
Overnight on Wall Street, the Dow Jones Industrial Average fell 0.18%, to 34,751.32; the S&P 500 lost 0.16%, at 4,473.75; and the Nasdaq Composite added 0.13%, at 15,181.92.
OIL
Oil prices little moved on Friday even as more supply came back online in the U.S. Gulf of Mexico following two hurricanes, with benchmark contracts on track to post weekly gains of around 4% as the output recovery is seen lagging demand.
Both contracts were on course to climb about 4% for the week, with Brent near a 7-week high and WTI near a 6-week high, as output in the U.S. Gulf of Mexico has recovered more slowly than expected after Hurricane Ida damaged facilities in August and tropical storm Nicholas hit this week.
The Brent now traded at $75.45 per barrel, while U.S. crude futures traded at $72.43 per barrel.
Overnight, the Brent ends at $75.67 a barrel, and the WTI at $72.61 per barrel.
CURRENCIES
The dollar held near 3-week highs against a basket of major currencies on Friday, last at 92.855 following a raft of strong U.S. economic data that rekindled expectations for earlier policy tightening by the U.S. Federal Reserve. The index is
The yield on benchmark 10-year Treasury notes was 1.338% compared with its U.S. close of 1.331%.
Cryptocurrencies stepped back from this week’s high with bitcoin traded at $47,864 and ether at $3,560.
GOLD
Gold prices were set for a second weekly loss as a firmer dollar dented the metal's allure for holders of other currencies while investors await a key U.S. Federal Reserve meeting for clues on how soon the central bank will start to taper stimulus.
Spot gold rose 0.25% to $1,758.10 per ounce, and the U.S. gold futures was flat at $1,759.30. Bullion slipped as much as 2.7% on Thursday and dropped 1.8% so far this week.
Silver was flat at $22.93 per ounce, after hitting its lowest in more than a month on Thursday. Platinum rose 1.10% to $933.50, while palladium dipped more than 2% to $1,977.50.
ECONOMIC OUTLOOK
Asian shares steadied in early trading on Friday after losses earlier in the week, with China jitters and global growth concerns weighed on investors’ minds, while the dollar sat near a three-week high.
Equities in broader Asia steadied in Friday trading, although China jitters and global growth concerns weighed on investors’ minds. The dollar meanwhile sat near a 3-week high following surprise strength in U.S. retail sales.
Traders are monitoring the heavy losses in Chinese property stocks amid fears that cash-strapped real estate giant China Evergrande's financial woes could trigger a contagion in the world’s second-largest economy. Beijing’s regulatory crackdown spanning technology to gambling again hurt a gauge of U.S.-listed Chinese shares as well as casino operators with exposure to Macau.
Both U.S. core retail sales and jobless claims data for August 2021 surprised the market and continued to lift the greenback’s performance. The Fed is widely expected to announce the tapering of its asset purchases during the FOMC 2-day meeting ending Sept 22, following the firmer U.S. data.
Global equities are on course for a second weekly drop, subdued by worries about the global economic recovery, impact of the Delta strain, the implications of elevated inflation and the upheavals in China.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 110.204 and 110.461.
- Support line of 109.372 and 109.115.
Commentary/ Reason:
The dollar bounced back to 109.837 yen, having gained 0.32% on Thursday and off Wednesday’s 6-week low of 109.113.
The rally in U.S. yields lend support to the greenback, while the Nikkei advancement on the day reducing the safe-haven demand for the yen.
The Bank of Japan is set to maintain its massive stimulus next week, as supply bottlenecks caused by factory shutdowns in Asia weigh on an economy already wobbling from the hit to consumption from the pandemic.
The yen has so far shown limited reaction to ruling Liberal Democratic Party’s (LDP) leadership race, which will formally kick off on Friday ahead of Sept. 29 vote. The LDP’s parliamentary dominance means the party’s new leader will become prime minister.
Intraday bias in USD/JPY remains neutral as it defended 109.115 support and rebounded. But upside is held well below 110.461 resistance so far. On the downside, break of 109.37 will argue that larger fall is resuming. Deeper decline should then be seen back to 109.115 support. And on the upside, above 110.204 will turn bias back to the upside for 110.461.
