In Asian Equity Markets stocks were largely on the front foot on Tuesday following Wall Street’s record highs on its first trading day of 2022, despite worries that the widespread Omicron COVID-19 variant could put the brakes on global economic recovery. Australia’s S&P/ASX 200 closed 2.01 percent higher with its metals and mining stocks hitting a 4-month peak. Japan’s Nikkei 225 also widened morning gains to rise 1.78 percent. MSCI’s gauge of Asia Pacific stocks outside Japan advanced 0.4 percent. China’s benchmark CSI300 Index lost 0.68 percent, dragged down by tech stocks.
In Currency Markets the U.S. dollar reached its strongest level in nearly five years against the Japanese yen on Tuesday, lifted by a jump in Treasury yields as traders bet on an early Federal Reserve interest rate hike despite rising COVID-19 cases. The greenback rose as high as 115.815 yen for the first time since Jan. 11, 2017. The euro traded at $1.1302, lifting off the one-week low of $1.12795 from overnight. Sterling fell to $1.34685, falling back toward the overnight trough of $1.3431. The Australian dollar hovered close to a near two-week low of $0.7184 reached in the previous session.
In US Equity Markets the S&P 500 and Dow posted closing record highs on the first trading day of the year on Monday, helped by gains in Tesla Inc and bank shares. The Dow rose 0.68 percent, to 36,585.06; the S&P 500 gained 0.64 percent, at 4,796.56; and the Nasdaq Composite added 1.2 percent, at 15,832.80. Apple Inc became the first company to hit a $3 trillion market capitalization but ended the day slightly below that. Tesla’s shares rose 13.5 percent after the electric car maker’s quarterly deliveries beat analysts’ estimates, riding out global chip shortages as it ramped up production in China.
In Commodities Markets oil settled higher on Monday on hopes of further demand recovery in 2022, despite OPEC+ looking set to agree to another output increase and persistent concerns about how rising COVID infections might affect demand. Brent crude settled up 1.5 percent, at $78.98 a barrel, having earlier risen as high as $79.05. U.S. West Texas Intermediate (WTI) crude settled up 87 cents at $76.08 a barrel. Spot gold fell 1.5 percent to $1,800.68 an ounce. Silver fell 1.9 percent to $22.82 an ounce, platinum fell 0.9 percent to $953.87 and palladium slid 3.8 percent to $1,819.61.
In European Equity Markets stocks rose on Monday, starting the year in an upbeat mood on hopes of steady economic recovery despite a surge in COVID-19 cases due to the Omicron variant. The pan-European STOXX 600 index ended 0.5 percent higher at a record close of 489.99 points. Stock indexes in Germany, France, Italy and Spain were up between 0.5 percent and 1.4 percent, while London markets were closed. Automakers led gains among European sectors with a 2.4 percent rise, following a slew of positive production reports and annual targets from global vehicle makers, including Hyundai and Tesla.
In Bond Markets U.S. Treasury yields rose on Monday in relatively thin trading, with several markets closed, as investors braced for what could be an earlier-than-expected interest rate hike by the Federal Reserve this year despite the recent jump in COVID-19 cases. In afternoon trading, U.S. 10-year yields hit a six-week high of 1.635 percent and were last up nearly 14 basis points at 1.6350 percent. U.S. 30-year yields were also up 14 basis points at 2.0176 percent. U.S. 2-year yields were last up nearly 5 basis points at 0.7778 percent. U.S. 5-year yields were last up 10 basis points at 1.3605 percent.