EQUITIES
Asia-Pacific markets were higher on Friday. In Japan, the Nikkei 225 led the advance, rose 1.56%, while mainland Chinese stocks also edged higher, with the Shanghai composite up 1.37% while the Hong Kong’s Hang Seng index gained 1.14%.
Over in South Korea, the KOSPI added 0.82%, and in Australia, the ASX 200 up 0.58%. The Singapore’s Straits Times index nudged higher, at 0.43%, while the India’s S&P BSE Sensex index rose 0.74%.
Overnight on Wall Street, the Dow Jones Industrial Average rose 0.62%, to 32,620.87, the S&P 500 gained 0.53%, to 3,909.73 and the Nasdaq Composite added 0.12%, to 12,977.68.
European markets edged lower following the biggest rise in new coronavirus cases in Germany since Jan. 9 and the largest number of patients with COVID-19 requiring intensive care in France so far this year.
OIL
Oil prices bounced back on Friday from a plunge a day earlier, weighed by the implications of a large container ship that ran aground in the Suez Canal on concerns that may block the vital shipping lane for weeks, that that saw prices swing wildly around $60 a barrel.
Crude is still down almost 4% for this week.
The Brent crude futures traded to $62.43 per barrel, and the U.S. crude futures at $59.17 per barrel.
Overnight, the Brent closed at $61.59 for Brent while WTI futures ended at $58.56 per barrel.
CURRENCIES
The dollar traded near multi-month highs against most major currencies on Friday, supported by a wave of optimism over improving U.S. economic data, the rollout of coronavirus vaccines, and rising Treasury yields. Concerns over new trade tensions between the U.S. and China also contributed to the greenback’s rally.
The dollar is headed for a weekly gain as the index hit its highest since November overnight, breaking its 200-day moving average. Against six major peers, it hovered around 92.77.
GOLD
Safe haven gold retreated on strengthening dollar. To trade at $1,724.70 an ounce, while slipped to around $1,722.80 per ounce for gold futures. Previously closed at $1,726.70 and $1,725.10, respectively.
ECONOMIC OUTLOOK
Asian stocks looked set to follow their U.S. peers higher amid progress on vaccine distribution and an end to some restrictions for banks, though market sentiment remains cautious due to the absence of fresh catalysts.
Technology stocks may rebound on the back of the positive overnight performance on Nasdaq. Although weighing on sentiment was a selloff in Chinese technology shares amid concern they will be delisted from U.S. exchanges on worries about a semiconductor shortage.
Traders are also weighing U.S.-China tensions, as President Biden highlighted the rivalry between the two largest economies and declined to comment on whether import tariffs would remain in place.
Federal Reserve Chairman Jerome Powell acknowledged Thursday that fiscal help from Congress and accelerated distribution has allowed the U.S. to recover faster than expected.
U.S. GDP rose at a 4.3% annualized rate in the Q4, the Commerce Department’s third estimate showed on Thursday.
To date, number of confirmed worldwide cases for COVID-19 pandemic has surpassed 125.42 million, recording more than 2.75 million fatality globally.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 109.350 and 109.533.
- Support line of 108.759 and 108.577.
Commentary/ Reason:
The dollar bought 109.266 yen, which is its new weekly high as it climbs for three straight days.
The dollar strength was majorly supported by the rising Treasury yields, aside from the wave of optimism over improving U.S. economic data, the rollout of coronavirus vaccines, and concerns over new trade tensions between the U.S. and China.
A rally in Japan’s Nikkei Stock Index on Thursday and Friday sessions also reduced the safe-haven demand for the yen and boosted USD/JPY.
The yen also fell back on the release of the minutes of the BOJ’s Jan 20-21 policy meeting.
