ASX 200, Nikkei 225 Outlook: Pressure from Rising Yields, Stronger USD

 

DOW JONES, NIKKEI 225, ASX 200 INDEX OUTLOOK:

• ASX 200, Nikkei 225 indexes face a souring day as US stocks retreated from record highs
• 10-year Treasury yield climbed to 1.15% on a rising inflation outlook, USD edged higher
• Stocks, commodities, EM currencies may struggle to sustain their recent rally, eyeing a pullback

DOW JONES, YIELDS, USD, COMMODITIES, BITCOIN, ASIA-PACIFIC AT OPEN:

Asia-Pacific equities face a tough day ahead as US equities retreated alongside commodities prices in a wake of rising longer-dated US Treasury yields. The inflation outlook appears to be buoyed by stimulus and reflation hopes after Democrats gained control of the Senate, raising the likelihood of further spending that aims to raise demand and output in the long term. Over last week, the 10-year US Treasury yield surged more than 20 bps to 1.147% – a significant move that rippled across the financial markets. The 20- and 30-year yields also climbed to 1.685% and 1.885% respectively.

Japanese Yen Price Outlook: AUD/JPY, CAD/JPY, NZD/JPY Levels to Watch

 

JAPANESE YEN, AUD/JPY, CAD/JPY, NZD/JPY – TALKING POINTS:

• Bearish RSI divergence hints at near-term pullback for AUD/JPY.
• CAD/JPY rates challenging key long-term downtrend resistance.
• NZD/JPY uptrend may be running out of steam.

The Japanese Yen has lost a significant amount of ground against its major counterparts in recent months and is at risk of further losses, as the haven-associated currency hovers precariously above sentiment-defining support. Here are the key levels to watch for AUD/JPY, CAD/JPY and NZD/JPY rates in the weeks ahead.

JAPANESE YEN INDEX** WEEKLY CHART – PERCHED PRECARIOUSLY ABOVE 200-MA

Dollar Up, Steadies as Investors Await Georgia Election Results

 

By Gina Lee

Investing.com – The dollar was up on Wednesday morning in Asia, steadying as vote counting continues for a U.S. Senate runoff election in the state of Georgia and investors awaiting the results to determine market sentiment’s next move.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies edged up 0.15% to 89.547 by 11:16 PM ET (4:16 AM GMT), briefly falling to a fresh ten-month low earlier in the session. 

The USD/JPY pair inched up 0.09% to 102.81.

TheAUD/USD pair inched down 0.05% to 0.7755 and the NZD/USD pair inched down 0.01% to 0.7251.

Gold Price Analysis: XAU/USD eyes $1942 as the next upside target – Confluence Detector

Kicking-off 2021 on a positive note, gold (XAU/USD) is holding onto weekly highs well above $1900, as the beleaguered US dollar continues to lick its wounds from 2020. Concerns over the coronavirus contagion and the likely tightening of restrictions globally boost the safe-haven appeal of gold.

Further, gold also benefits from caution ahead of the runoff Senate elections in Georgia, as traders brace for choppy trading ahead of the key US NFP release in the first full week of 2021. How is gold positioned on the charts? 

USD/JPY struggles near multi-week lows, just below 103.00 mark

• Sustained USD selling bias failed to assist USD/JPY to preserve its early modest gains.
• The risk-on mood undermined the safe-haven JPY and helped limit losses for the pair.
• The set-up favour of bearish traders and support prospects for further near-term losses.

The USD/JPY pair languished near the lower end of its daily trading range, with bears awaiting some follow-through selling below the 103.00 mark.

The pair failed to capitalize on its Asian session uptick, instead met with some fresh supply near the 103.30 region and dropped to near three-week lows on the first trading day of 2021. The intraday pullback of around 30-35 pips was exclusively sponsored by the prevalent bearish sentiment surrounding the US dollar.

The likelihood of additional US financial aid package and expectations that the Fed will keep interest rates lower for a longer period kept the USD depressed through the first half of the trading action on Monday. However, a combination of factors weighed on the Japanese yen and extended some support to the USD/JPY pair.

ASX 200, Hang Seng Weekly Open: Rally May Pause as Pandemic Worsens

S&P 500, ASX, 200, HANG SENG, ASIA-PACIFIC MARKET OUTLOOK:

• US equity indices closed at all-time highs, but the rally may take a pause on virus concerns
• ASX 200, Hang Seng and S&P 500 futures are mixed in view of viral resurgence and lockdowns
• Stimulus money, speculation and return of traders propelled cryptocurrencies, Bitcoin topped $33k

 Pandemic, PMIs, Bitcoin, Asia-Pacific Stocks Weekly Outlook:

Asia-Pacific markets may kick off the week with a mixed tone after all three major US indices finished the year at their record highs thanks to the Covid-19 vaccine rollout, the US stimulus package, as well as seemingly broad consensus that central banks will largely stay accommodative as the pandemic worsens.

Dollar on Borrowed Time as U.S. Twin Deficits Balloon

 By Wayne Cole

SYDNEY (Reuters) - The dollar was ending 2020 in a downward spiral on Thursday with investors wagering a global economic recovery will suck money into riskier assets even as the U.S. has to borrow ever more to fund its swelling twin deficits.

The euro stood at $1.2291, having hit its highest since April 2018 with a gain of almost 10% for the year. The next stops for the bull train are $1.2413 and $1.2476, on the way to the 2018 peak at $1.2555.

The dollar was lying at 103.15 yen, but managed to hold above the December low of 102.86.