Asian Stock Market: Recovery elongates on softer DXY, oil advances gradually
|- Asian indices have extended their recovery as the DXY weakens on lower estimates for US economic data.
- As per the market consensus, the US Durable Goods Orders are seen at 0.1% vs. 0.5% reported earlier.
- Oil prices have rebounded as investors have started underpinning the supply constraints.
Markets in the Asian domain have extended their rebound as the US dollar index (DXY) has displayed a weak performance in the Asian session. The DXY started declining right from the first tick on Monday and slipped to near the round-level support of 104.00. The weakness in the DXY is backed by lower forecasts for the US Durable Goods Orders.
At the press time, Japan’s Nikkei and China A50 jumped 1.40%, Hang Seng surged 3.20% and Nifty50 gained 1.30%.
A preliminary estimate for the US Durable Goods Orders is 0.1% against the former release of 0.5%. It is worth noting that the Manufacturing and Services PMI that were released last week, were significantly lower than the estimates and their prior releases.
A spell of weak economic data is indicating a slump in the overall demand structure. This might be the outcome of the price pressures and its associated interest rate hike decisions. In case of a weak economic data release, the DXY could display some more losses.
On the oil front, oil prices have witnessed a rebound after finding significant bids around the psychological support of $100.00. The black gold is expected to extend its recovery as supply constraints will cover the demand worries. The supply constraints are a prolonged phenomenon now as the prohibition of Russian oil will stay longer and it won’t be easy for the OPEC cartel to fix the supply imbalance.
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