Gold has broken out above the key resistance level of $1,286 for the first time after three months of sideways movement. It was trading at $1,290 this morning.

Gold and USD/JPY formed an 'inverted mirror image' over the last two days, which showed that a weaker US dollar has fuelled a commodities rally. Recent volatility in USD/JPY and its impact on the equities market has also raised demand for safe-haven assets.

Crude oil prices, on the other hand, dropped 2.5% as higher-than-expected Iranian output raised worries of oversupply. Bloomberg OPEC crude oil production data shows that Iran’s April crude production reached 3.5 million barrels a day, a sharp rise from 3.2 million in March. At this speed, it will probably reach the 4-million-barrels-a-day target by June. Nonetheless, expectation has been gradually building that an agreement will eventually be reached at June's OPEC meeting, as low oil prices are hurting all the OPEC members.

Gold and USD/JPY formed an 'inverted mirror image' over the last two days, which showed that a weaker US dollar has fuelled a commodities rally. Recent volatility in USD/JPY and its impact on the equities market has also raised demand for safe-haven assets.

Crude oil prices, on the other hand, dropped 2.5% as higher-than-expected Iranian output raised worries of oversupply. Bloomberg OPEC crude oil production data shows that Iran’s April crude production reached 3.5 million barrels a day, a sharp rise from 3.2 million in March. At this speed, it will probably reach the 4-million-barrels-a-day target by June.

Nonetheless, expectation has been gradually building that an agreement will eventually be reached at June's OPEC meeting, as low oil prices are hurting all the OPEC members.

Equities
The Nikkei 225 closed 3.1% lower on Monday as the yen strengthened further to 18-month highs at 106.00 per USD, after the BOJ held fire on more stimulus. The other major markets in the region - such as China, Taiwan and Singapore - were closed for a public holiday. The US market closed higher, led by consumer, energy and financial sectors.

DBS’s Q1 earnings grew 6% year on year to S$1.20 billion and its total income rose 5% year on year to S$2.87 billion. Earnings per share (EPS) at S$0.48 has beaten analysts’ estimates of $0.42. The growth is mainly due to higher net interest income which rose by 8% to S$1.83 billion. Non-interest income dropped by 2% on lower trading income and investment profits.

The non-performing loans ratio has risen 0.1% from a quarter ago to 1%. For peer comparison, UOB and OCBC have registered first-quarter earnings drops of 4.4% and 14% respectively.

FX
USD/JPY was trading at around 106.10 this morning, extending its losses following the BOJ’s decision to take no further action on its monetary policy. If this trend continues, the strong yen may hurt economic growth and dampen the outlook on inflation. This will probably motivate the central bank to take the necessary actions or intervene.

The immediate support level is 105.26 and resistance is 107.00. USD has weakened against its peers, with USD/CAD reaching a ten-month low at 1.2510. USD/SGD also pulled back to the 1.3400 area.

USD/JPY

 
Key technical levels to watch:

  • Immediate support levels: 105.26, followed by 103.70
  • Immediate resistance levels: 107.00, followed by 108.30

 


CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

 

The Nikkei 225 closed 3.1% lower on Monday as the yen strengthened further to 18-month highs at 106.00 per USD, after the BOJ held fire on more stimulus. The other major markets in the region - such as China, Taiwan and Singapore - were closed for a public holiday. The US market closed higher, led by consumer, energy and financial sectors.

DBS’s Q1 earnings grew 6% year on year to S$1.20 billion and its total income rose 5% year on year to S$2.87 billion. Earnings per share (EPS) at S$0.48 has beaten analysts’ estimates of $0.42. The growth is mainly due to higher net interest income which rose by 8% to S$1.83 billion. Non-interest income dropped by 2% on lower trading income and investment profits. The non-performing loans ratio has risen 0.1% from a quarter ago to 1%. For peer comparison, UOB and OCBC have registered first-quarter earnings drops of 4.4% and 14% respectively.

FX
USD/JPY was trading at around 106.10 this morning, extending its losses following the BOJ’s decision to take no further action on its monetary policy. If this trend continues, the strong yen may hurt economic growth and dampen the outlook on inflation. This will probably motivate the central bank to take the necessary actions or intervene. The immediate support level is 105.26 and resistance is 107.00. USD has weakened against its peers, with USD/CAD reaching a ten-month low at 1.2510. USD/SGD also pulled back to the 1.3400 area.

USD/JPY

Chart
 
Key technical levels to watch:
Immediate support levels: 105.26, followed by 103.70
Immediate resistance levels: 107.00, followed by 108.30


CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.