Markets in the Asian domain are displaying modest gains following the recovery move in the S&P500 futures in the Asian session. Technically, the 500-United States stock basket futures have rebounded as oscillators have turned extremely oversold after a three-day losing streak. Still, it is critical to consider the current risk profile a positive one as the US Dollar Index (DXY) is attempting to come out of the woods and has refreshed its day high at 101.80.
At the press time, Japan’s Nikkei225 gained 0.26%, ChinaA50 climbed 0.44%, Hang Seng jumped 1.06%, and Nifty50 eased 0.18%.
The demand for US government bonds is easing further as Federal Reserve (Fed) policymakers are continuously chattering about the continuation of higher interest rates for a longer period of time as the journey towards the 2% inflation goal is far from over. The 10-year US Treasury yields have climbed above 3.41%.
Japanese equities have sensed buying interest following the release of mixed Japan’s National Consumer Price Index (CPI) data. Japan’s National headline CPI has landed at 4.0%, lower than the consensus of 4.4% but higher than the former release of 3.8%. While the core inflation that excludes oil and food prices has soared to 3.0% higher than the expectations of 2.9% and the prior release of 2.8%. National CPI that excludes fresh food has remained in line with the estimates at 4.0%.
Meanwhile, Chinese stocks have picked strength despite the People’s Bank of China (PBoC) announcing an unchanged monetary policy. The PBoC kept its Loan Prime Rates (LPRs) steady consecutively for the fifth month. PBoC's deputy governor Xuan Changneng recently said that the board had pledged to take further measures to boost market confidence and increase support for manufacturers and small companies, amid hopes that the economy will stage a solid rebound in CY2023.
On the oil front, oil prices have surpassed the critical resistance of $81.00. The black gold has picked strength despite bumper oil stockpiles reported by the Energy Information Administration (EIA) on Thursday for the week ending January 13. The EIA reported a significant jump in oil inventories by 8.408 million barrels.
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EUR/USD is holding onto minor gains while trading below 1.0800 in European trading. ECB's Lagarde reiterates that the central bank will stay the course with rate hikes. The US Dollar attempts a bounce alongside the US Treasury bond yields, despite a better risk profile.
GBP/USD is holding lower ground near 1.2350, undermined by the downbeat UK Retail Sales data and a broad US Dollar rebound. Cable fails to capitalize on the return of risk flows, as traders reposition ahead of China's Lunar New Year holidays.
Gold price refreshed nine-month highs above $1,935 in European trading. The uptick in US Treasury yields is capping Gold’s upside amid the subdued US Dollar. Upside bias remains intact for Gold price amid a bullish daily technical setup.
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