Crude oil futures rebounded sharply last night as a workers strike in Kuwait reduced crude output. WTI oil futures closed 1.4% lower, narrowing from the 6% losses early yesterday.

The Doha meeting failed to achieve any freeze agreement and will probably continue to weigh on crude oil prices until Saudi Arabia and Iran can reach a consensus to freeze. Nonetheless, the market will probably build expectation that an agreement will be reached at June's OPEC meeting, as low oil price are hurting all the OPEC members. The gold price is still range bound between $1,220 - $1,260, which are also the immediate support and resistance levels.

Equities
Asian equity markets opened lower on Monday as lower oil prices pressured the energy sector. Singapore’s oil and gas players Keppel Corp (-2.0%) and SembCorp Marine (-3.1%) ended lower.

The Nikkei 225 index closed 3.4% lower after a strong M7+ earthquake struck the Kumanoto region of Kyushu, Japan. The insurance sector including Tokio Marine Holdings (-5.9%) and MS & AD Insurance (-7.3%) got hammered as the market factored in billions of insured losses.

On the other hand, construction and cement stocks like Toyo Construction (+3.25%) and Taiheiyo Cement (+2.72%) ended higher. The US market finished higher, led by the consumer discretionary and energy sectors. The Dow Jones stands above 18,000 for the first time this year.

FX
USD/JPY has rebounded to 109.10 this morning. The immediate support level is 107.65 and resistance is 110.00. USD/CAD retraced back to 1.2770 as the oil price rebound lifted commodity currencies. AUD/USD extended its rally and hit 0.7770 this morning, a fresh high this year. USD/SGD also pulled back to the 1.3510 area.

Japan 225 - Cash


 
Key Technical levels to watch:

  • Immediate resistance levels: 16,800, followed by 17,400
  • Immediate support levels: 16,245, followed by 16,000

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