EQUITIES
Shares in Asia-Pacific were lower on thinned Monday trade. In Hong Kong, the Hang Seng index led losses among the region’s major markets as it fell -1.51% by the afternoon. South Korea’s KOSPI shed -0.43%, the Singapore’s Straits Times Index slipped -1.36% and India’s BSE Sensex edged -0.57% lower.
Over in Australia, the S&P/ASX 200 bucked the overall market trend, to advance above the flatline, added 0.08%.
Markets in China, Japan and Thailand are closed on Monday for holidays.
OIL
Oil prices slipped on growing concerns of a full lockdown in India. The Brent crude futures traded at $66.53 per barrel, and U.S. crude futures traded at $63.34 per barrel.
On Friday, the Brent closed at $66.76 while WTI ended at $63.58 per barrel.
CURRENCIES
The US dollar was broadly steady. The dollar index stood at 91.35 and off a 2-month trough of 90.42, though it still ended April with a loss of 2%.
U.S. Treasury Secretary Janet Yellen on Sunday tamped down concerns that President Joe Biden's plans for infrastructure, jobs and families will cause inflation, saying the spending will be phased in over a decade.
The 10-year U.S. Treasury yield edged lower to 1.626%.
Cryptocurrency ether broke past $3,000 on Monday to set a record high, as investors bet that ether will be of ever greater use in a decentralised future financial system. Bitcoin regained the $50,000-mark last week and hovered around $58,000 on Monday.
GOLD
Gold prices ticked up on Monday, supported by a muted dollar and a retreat in U.S. Treasury yields ahead of a series of U.S. data later in the week.
The spot gold rose to trade at $1,773.40 an ounce and advanced to $1,773.00 per ounce for gold futures. Previously closed at $1,769.10 and $1,767.70, respectively.
ECONOMIC OUTLOOK
Asian regional markets got off to a slow start on Monday as holidays in China and Japan crimped volumes and investors awaited a raft of data this week, which should show the U.S. leading a global economic recovery.
A busy week for U.S. economic data is expected to show resounding strength, particularly for the ISM manufacturing survey and April payrolls. Fed’s Powell is due to speak later Monday and will be followed by a raft of Fed officials this week.
Among U.S. corporate earnings due today include DISH Network and XPO Logistics.
Investors continued monitoring the COVID-19 situation in India as the country continues to battle a deadly second wave of infections. Over the weekend, more than 400,000 daily new cases were registered for the first time.
To date, number of confirmed worldwide cases for COVID-19 pandemic has surpassed 152.50 million, recording more than 3.19 million fatality globally.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 109.603 and 109.765.
- Support line of 108.975 and 108.795.
Commentary/ Reason:
The dollar fared better on the yen at 109.644, well above its recent low of 107.46 to record a new 2-1/2-week high.
Liquidation of long yen positions on Friday by investors ahead of Japan’s Golden Week holidays started today weighed on the yen and pushed USD/JPY higher. Japanese financial markets will be closed until Wednesday for the Golden Week holidays.
Liquidity demand for the also dollar increased Monday after Asian stock indexes retreated on the day.
Comments on Friday from Dallas Fed President Kaplan were meanwhile supportive for the dollar when he said, "we're now observing excesses and imbalances in markets, and I think it will be appropriate for us to start talking about adjusting asset purchases.", referring to possible bond tapering by the Fed.
Asian currencies, including the yen, will be influenced by the U.S. FOMC meeting and China's PMI this week.
