June 26, 2022


The U.S share futures and recovery of oil prices from the previous day’s selloff lead Asian stocks to rise on Wednesday from a one-year low. However, investors are on edge over the uncertainty and impact of the Omicron coronavirus variant.

The U.S Fed chair Jerome Powell overnight came close to indicating the Fed will boost the pace of its asset purchases at its meeting later this month, thus leading U.S. Treasury yields to rise and supporting the dollar.

Market summary –

• As traders felt Tuesday’s declines, which sent the benchmark to its lowest since November 2020 led MSCI’s broadest index of Asia-Pacific shares outside Japan to rise 0.6. Similar gains were largely shared across the region.
• Japan’s Nikkei index rose 0.7%, over rise in factory activity.
• While U.S. S&P 500 futures rose 0.6%.
• As sentiment turned after Dow Jones Industrial Average, Nasdaq futures rose 0.7%.
• The S&P 500 and the Nasdaq Composite had all closed down over 1.5%.
• The yield on two-year notes last stood at 0.6025%.
• The benchmark 10-year notes sold off yielding at 1.4919%, up from Tuesday’s two-and a half month low of 1.4443%.
• The dollar remained steady against most peers, thus rising yields and gaining ground on the Japanese currency, rising to 113.4 yen . FRX
• On Wednesday, the Australian dollar weakened near a one-year low at $0.7138 over stronger dollar. The dollar had sat out gains by other typically risk-friendly assets like Asian equities.
• The U.S. West Texas Intermediate (WTI) crude futures rose 1.9%, to $67.43 a barrel.
• The Brent crude futures traded at 2.22%, gaining to $70.78 a barrel.
• Gold spot price stood at $1,776 an ounce, up 0.16% and largely within its recent range.

According to Powell, he mentioned that in December the U.S. central bankers will discuss whether to end their bond purchases a few months earlier than had been anticipated. Thus pointing to a strong economy, hindered workforce growth, and high inflation that is expected to last into mid-2022.

After steep falls of oil prices in the previous session, it reacted more strongly and prices regained some ground on Wednesday.