【Market Evening】Asian markets rise, Yen sinks, Gold gains as soft dollar
Singapore is seeing daily record Covid cases; Gold gains as soft dollar lifts bullion appeal; Fed in focus; Yen sinks, Aussie climbs as Evergrande contagion fears recede. Oil gains for fifth day amid supply constraints.

Gold gains as soft dollar
Gold prices firmed on Monday, propped up by a subdued dollar and slight retreat in the U.S. Treasury yields, with investors gearing up for speeches from U.S. Federal Reserve policymakers this week for cues on the central bank’s rate hike timeline.
Spot gold price rose 0.27% to $1751.16 per ounce and spot silver rose
0.78% to $22.53 per ounce by 17:30(GMT+8).
The US dollar index softened, making bullion cheaper for holders of other currencies. Meanwhile the benchmark 10-year Treasury yields eased after hitting their highest since early-July.
“Gold is still looking slightly precarious where it is right now, and it’s probably bouncing off key technical level around $1,750,” IG Market analyst Kyle Rodda said.
A slew of Fed officials are due to speak this week including Chairman Jerome Powell, who will testify this week before Congress on the central bank’s policy response to the pandemic.
“There’ll be a lot of questions being put to Fed speakers about what the dot plots implied last week and whether there is higher risk of heightened inflation going forward and that rate hikes could be coming in the first half of 2022,” Rodda added.
Investors also kept a close watch on developments in debt-laden property giant China Evergrande saga as the firm missed a payment on offshore bonds last week, with further payment due this week.
Yen sinks, Aussie climbs as Evergrande contagion fears recede
The safe-haven yen sank to its lowest in nearly three months on Monday, while the risk-sensitive Australian dollar continued to recover from an almost one-month low, as fears of widespread contagion from China Evergrande Group receded.
The yen also fell as higher U.S. yields attracted Japanese investor money, while rising commodity prices helped the Aussie and Norway’s crown.
U.S. yields climbed to their highest since the start of July in anticipation of tighter U.S. monetary policy, while the dollar hovered in the middle of its range of the past week versus major peers.
The euro traded little changed at $1.1724, largely ignoring developments in German elections on the weekend, with the Social Democrats projected to narrowly defeat the CDU/CSU conservative bloc.
The benchmark 10-year U.S. Treasury yield touched 1.466% for a second day on Monday, the highest since July 2.
“The correlation between U.S. bonds yields and USDJPY has picked up,” Chris Weston, head of research at brokerage Pepperstone in Melbourne, wrote in a client note.
“USDJPY looks a little stretched, so I’d be wary to chase here, but I would be looking for a re-test of 110.50 as a potential support zone within what is a progressively bullish trend.”
The Aussie climbed 0.37% to $0.7282, up from $0.72205 a week ago, its lowest since Aug. 24.
Oil gains for fifth day amid supply constraints
Oil prices rose for a fifth straight day on Monday with Brent heading for $80 amid supply concerns as parts of the world sees demand pick up with the easing of pandemic conditions.
Brent crude oil price rose 1.46% to $78.35 a barrel while U.S. West Texas Intermediate crude oil price was at $74.91 a barrel, up 1.39% by 17:30(GMT+8).
"Supply tightness continues to draw on inventories across all regions," ANZ Research said in a note.
Rising gas prices as also helping drive oil higher as the liquid becomes relatively cheaper for power generation, ANZ analysts said in the note.
Caught short by the demand rebound, members of the Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, have had difficulty raising output as under-investment or maintenance delays persist from the pandemic.
China's first public sale of state oil reserves has barely acted to cap gains as PetroChina and Hengli Petrochemical bought four cargoes totalling about 4.43 million barrels.
India's crude oil imports hit a three-month peak in August, rebounding from nearly one-year lows reached in July, as refiners in the second-biggest importer of crude stocked up in anticipation of higher demand.
Asian markets rise
Asian shares were mostly higher Monday, but fears of further waves of coronavirus outbreaks were clouding the economic outlook for the region, tempering the rally.
Nikkei 225 fell 0.03% to 30,240.06.
Hang Seng Index rose 0.07% to 24,208.78.
Taiwan capitalization weighted stock rose 0.31% to 17,313.77.
S&P/ASX 200 rose 0.57% to 7,384.20.
South Korea KOSPI rose 0.27% to 3,133.64.
Japan’s ruling party will hold an election later this week to choose a leader, who is likely to succeed Yoshihide Suga as prime minister after just one year in office. All the candidates are certain to stick to the nation’s pro-U.S. policies, despite some nuances in their views.
They also are all promising to boost government spending to try to catalyze growth in the world’s third largest economy.
Analysts also say Japan’s central bank “tankan” economic survey for the third quarter, due out Friday, likely will show a deterioration in business conditions because of various disruptions to supply chains and renewed outbreaks of COVID-19 in many regions.
Although some parts of the world have lifted COVID-19 restrictions and are gradually returning to “normal” life, worries remain in Asia about further waves of infections because vaccine rollouts have been slower than the West in some nations.
In Singapore, further COVID-19 restrictions kicked off in an attempt to curb the virus’ spread, as daily new cases have topped the city-state’s peak reached in April 2020.
“Overall, the manufacturing sector may remain resilient as seen from previous phases of restrictions, but the services sector may come under pressure. That said, previous business adjustments and softer tightening compared to past restriction phases may aid to reduce some impact,” said Yeap Jun Rong, market strategist at IG in Singapore.
Focus Tonight
20:30(GMT+8):United States Durable Goods Orders MoM (AUG), Forecast: 0.7%, Previous: -0.1%;
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