EQUITIES
Shares in Asia-Pacific were mixed in Wednesday trade. The Nikkei 225 in Japan rose 0.36% as data showed Japan’s economy grew faster than previous estimates. Mainland Chinese stocks also were higher, with the Shanghai composite rising 0.07%. The S&P BSE Sensex in India marginally changed.
Elsewhere, the Hong Kong’s Hang Seng index flipped on earlier gains to turn 0.52% lower. South Korea’s KOSPI dipped 0.83%, the S&P/ASX 200 in Australia shed 0.39%, and the Singapore’s Straits Times index was down by 0.72%.
Overnight on Wall Street, the Dow Jones Industrial Average dropped 269.09 points to 35,100 while the S&P 500 shed 0.34% to 4,520.03. The Nasdaq Composite advanced to another record close as investors switched out of cyclicals into blue-chip tech stocks. Meanwhile European stocks retraced ahead of an ECB policy meeting on Thursday.
OIL
Oil steadied after a two-day decline as investors assessed a demand outlook clouded by the outbreak of the Delta variant in many regions, while the producers in the U.S. Gulf of Mexico struggling to restart operations nine days after Hurricane Ida swept through.
Traders will be closely watching inventory data from the API industry group due on Wednesday and the U.S. EIA on Thursday for a clearer picture of the storm's impact on crude production and refinery output.
The Brent now traded at $71.70 per barrel, while U.S. crude futures traded at $68.45 per barrel. Overnight, the Brent settled at $71.69 a barrel, and the WTI ends at $68.35 per barrel.
CURRENCIES
The dollar hovered near a one-week peak on Wednesday against major peers, buoyed by higher Treasury yields and a weaker euro amid caution before a European Central Bank policy decision.
The U.S. dollar index was at 92.555 following a recent climb from below 92.4.
The benchmark 10-year Treasury note rose as high as 1.385% on Tuesday for the first time since mid-July, and now last at 1.365%.
Bitcoin was nursing losses after plunging overnight amid El Salvador’s troubled rollout of the largest cryptocurrency as legal tender, hampered by technical glitches to the official digital wallet that later appeared to be resolved. The virtual coin was trading at about $46,449, having slid as much as 17% a day earlier before paring some of the losses. The downdraft also swept across tokens such as Ether and Dogecoin.
GOLD
Gold prices steadied on Wednesday, after slipping 1.6% in the previous session following gains in the dollar and a rise in U.S. Treasury yields.
Spot gold rose 0.14% to $1,796.70 per ounce, hovering slightly above the more than 1-week low of $1,791.90 hit on Tuesday. The U.S. gold futures were steady at $1,799.90.
Silver rose 0.11% to $24.40 per ounce, platinum edged 0.3% higher to $999.90 and palladium was up 0.85% to $2,373.50.
ECONOMIC OUTLOOK
Asian shares were mixed on Wednesday, as a more risk-averse mood spread into the market amid ongoing concerns about the COVID-19 Delta variant’s impact on economic recovery, while balanced on hopes that the Federal Reserve will delay tapering its bond purchases.
Chinese technology equities jumped on bets that the worst of Beijing’s regulatory crackdown has passed.
TECHNICAL OUTLOOK
[USDJPY]
Important Levels to Watch for Today:
- Resistance line of 110.506 and 110.763.
- Support line of 109.673 and 109.415.
Commentary/ Reason:
The greenback jumped to a 1-week high versus Japan’s currency earlier today, and last trading at 110.360 yen after being lifted by higher U.S. yields.
While for the yen, traders are looking for clues for new monetary policies from the new PM candidates, after incumbent PM Suga announced that he will not be extending his premiership.
Japan's economy grew faster than the initially estimated in the April-June quarter, helped by solid capital expenditure, although a resurgence in COVID-19 is undermining service-sector consumption and clouding the outlook, data by the Cabinet Office released on Wednesday.
Intraday bias in USD/JPY remains neutral as sideway trading is still in progress. On the upside, the first resistance is at 110.368, and the next is to retest the 110.763, a 1-month high.
On the downside, the next downside target and potential support zone is 109.673 to 109.415.
