- Dow Jones index edged higher while the Nasdaq Composite retreated from record highs
- Weaker-than-expected US inflation data led the US Dollar lower, buoying commodity prices
- Asia-Pacific markets are heading into quieter trading sessions due to the Chinese New Year Holiday
INFLATION, US DOLLAR, PLATINUM, CNY HOLIDAY, ASIA-PACIFIC STOCKS OUTLOOK:
Wall Street stocks hovered near record highs as Democrats moved closer to pass the US$ 1.9 trillion stimulus package without Republican support. Fed Chair Jerome Powell addressed the need for accommodative monetary policy in a speech last night, underscoring that the US job market is far from full recovery. His dovish stance and weaker inflation data led the US Dollar lower. The Dow Jones Industrial Average index finished 0.20% higher on reflation hopes, while the Nasdaq Composite retreated by 0.25%.
Asia-Pacific equities are probably heading into a quieter trading day as mainland bourses are closed for the Chinese New Year holiday and the Hong Kong Stock Exchange is trading for half of a typical day. Futures across Japan, Hong Kong, Singapore, India are pointing to a lower start, whereas those in Australia, South Korea, Malaysia, Thailand are edging higher.
Australia’s ASX 200 index opened slightly lower and quickly bounced back. Materials (+1.47%), communication services (+1.04%) and energy (+0.80%) are leading, whereas information technology (-1.40%) and consumer discretionary (-0.88%) sectors are lagging.
The US Dollar Index (DXY) declined for the third day after the release of weaker-than-expected US inflation data. US core CPI, which excludes volatile food and fuel costs, came in at 1.4% YoY in January. This is slightly below the baseline forecast of 1.5% and also marked a decline from December’s reading of 1.6%. The headline CPI reading advanced 0.3% MoM due to higher fuel prices, in line with expectations. But, the year-on-year print still fell short of market expectations. Tepid inflation rates reflected the lingering impact of the pandemic and may refrain the Federal Reserve from considering tapering any time soon.
Weaker inflation readings also led the US Treasury yield curve to flatten slightly, with the 5-, 10- and 20-year yields declining by 2.3bps, 3.3bps, and 3.5bps to 0.451%, 1.123%, and 1.733% respectively. Lower yields, alongside a weaker US Dollar, may continue to support commodity prices. Platinum, a precious metal that can be used as a catalyst in fuel cells for electric vehicles, soared to a six-year high of US$ 1,251.
No comments:
Post a Comment