Equity Markets

The constructive mood seen in most Asia Pacific stocks and US equity futures does not appear to be affected by strong US inflation data as well as FOMC meeting minutes statement proposing to start ‘Tapering’ either in mid -November or December.

The ASX 200 (+0.8%) traded higher following gains in technology stocks and the mining sector driven by rising commodity prices.

The Nikkei 225 closed big with a gain of 1.3% on the weakness of the Yen as well as a big shift by foreign investors to net purchases of Japanese shares.

KOSPI closed with +1.0%, in line with the current mood showing a decline in weekly Covid-19 cases.

Commodity Market

WTI crude oil futures rose to test the USD81 level following the optimistic market tone.

Elsewhere, gold prices were stable, aided by the weakness of the USD as well as a decline in real US Treasury bond yields.

Forex market

The Dollar Index (DXY) remained weak below the 94.00 level following a poor performance yesterday after there was a decline in real yields of US treasury bonds.

The EURUSD pair rose on the back of the weak USD and GBPUSD continued its climb from yesterday with the European Union proposing to remove most of the inspection of goods from Britain to Northern Ireland in a bid to ensure smoother trade with the UK.

USDJPY is supported by optimistic market conditions. Although the USD has a bad story, the Yen is usually more depressed than the USD in this environment.

Next, the AUD ignored the mixed Australian jobs data and continued its surge against the USD in particular. Although, there was a large-than-expected decline in the Australian employment sector yet the unemployment rate in Australia was printed lower than the market forecast.