Equities

Asian stock markets closed lower amid investor uncertainty about the economic recovery as a result of COVID-19 despite more positive sentiment from the US boosting the index on Wall Street yesterday.

The ASX 200 (-0.7%) declined due to a fall in the financial sector amid a decline in Commonwealth Bank (CBA) shares despite quarterly cash profit soaring 20%, as operating income was stable and it noted that loan margins were much lower.

The Nikkei 225 (-0.4%) re-erased its opening gain after disappointing Machine Orders and in the wake of Exports growing at the slowest rate in 8 months.

The Hang Seng (-0.7%) and the Shanghai Composite (+0.4%) were little changed with the Hong Kong Market being dragged lower by tech stocks including after the NetEase earnings report.

Commodities

Crude oil prices fell below $ 79 a barrel on Wednesday after a fall in U.S. crude oil stocks raised concerns that the Biden administration might use emergency reserves to limit rising crude oil prices.

Gold prices returned to the $ 1,850 level after almost hitting $ 1,880 in the previous session as better-than-expected U.S. retail sales data gave support to the U.S. dollar and boosted investor optimism about the Fed’s earlier policy tightening.

Forex

The US dollar surged above the 96.00 level after better-than-expected US retail sales data gave support to the US dollar and boosted investor optimism about the Fed’s earlier policy tightening.

Meanwhile, rising US Treasury bond yields caused the JPY to be under pressure with USD/JPY approaching the 115.00 level.

The pound continued to strengthen after UK employment data showed the unemployment rate declined and employment rose in October even though the employment scheme had expired at the end of September.

Investors are now waiting for UK inflation data to be published in today’s European session. Rising inflation could boost investor sentiment about an interest rate hike from the BOE.