EQUITIES
Shares in Asia-Pacific traded mixed on Thursday trade. The Nikkei 225 in Japan were lower, shedding 0.67% while the South Korea’s KOSPI slipped 0.64%, and the Hong Kong Hang Seng index retreated by 0.20% lower.
Elsewhere, the Shanghai composite index advanced 0.31%, while the Australia’s S&P/ASX 200 rose 0.33%, the Singapore’s FTSE Straits Times Index climbed 0.50%, and the India’s S&P BSE Sensex index was 0.75% higher.
Overnight on Wall Street, all three main indexes closed higher driven by consumer discretionary, communication services and financial sectors.
OIL
Oil prices were lower as a stronger U.S. dollar and worries that a possible return of Iranian supply would cause a glut dampened demand, outweighing the bullish sentiment generated by the data from the EIA.
The Brent crude futures traded at $68.41 per barrel, and U.S. crude futures traded at $65.73 per barrel.
Overnight, the Brent closed at $68.87 while WTI ended at $66.21 per barrel.
CURRENCIES
The U.S. yield climbed, followed by the dollar. The benchmark 10-year Treasury yield up to 1.582%, and the dollar index rose to 1-week top of 90.05. The dollar was steady after rising for the first time this week amid short covering as investors rebalance their portfolios ahead of month end.
Bitcoin retreated again below $40,000.
GOLD
Gold prices slipped from a 4-month high, in parallel with the rebounding U.S. dollar and Treasury yields.
The spot gold slipped to trade at $1,896.50 an ounce and down to $1,895.50 per ounce for gold futures. Previously closed at $1,896.80 and $1,901.20, respectively.
ECONOMIC OUTLOOK
Asian shares pulled back from positive opening on Thursday as investors reacted to the release of Chinese industrial profits data for April, after been supported earlier by a stabilised market sentiment amidst easing concerns over the U.S. Fed rate prospects.
Earnings at China's industrial firms grew at a slower pace in April. The industrial firms rose 57% year-on-year in April to 768.63 billion yuan ($120.22 billion), down from March YoY growth of 92.3%.
API figures on Tuesday showed U.S. crude oil and fuel inventories dropped last week. The crude stocks fell by 439,000 barrels in the week ended May 21, gasoline inventories fell by 2 million barrels and distillate stocks dropped by 5.1 million barrels.
The EIA oil data on May 26 meanwhile reported a larger crude inventory draw. The U.S. crude inventories falling by 1.66 million barrels, while gasoline and distillate inventories falling by 1.75 million barrels and 3.01 million barrels, respectively.
Some of the main moves in markets today including the U.S. initial jobless claims, GDP, durable goods and pending home sales.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 109.311 and 109.497.
- Support line of 108.707 and 108.521.
Commentary/ Reason:
The dollar rose to a 1-week high against the Japanese yen earlier on Thursday and was last stand at 109.056 per yen.
Dollar rose from emerging views the Fed is slowly but surely edging towards a discussion about tightening monetary policy.
Meanwhile for the Japanese yen, it is cautioned that market sentiment is likely to remain weak as Japan’s COVID-19 cases continue to be on the rise, while the vaccine rollout is slightly behind schedule.
The yen is also under pressure on lower bond yields after the 10-year Japan JGB bond yield on Wednesday fell to a 1-month low of 0.070%.
Market participants now await the monthly U.S. personal consumption report due on Friday to gauge inflationary pressure. U.S. gross domestic product, jobless claims data are due later today.
