SINGAPORE - Oil traded near seven-week lows on Tuesday as a softening demand outlook weighed on commodities, while bond, currency and stock markets traded cautiously ahead of central bank meetings in the U.S. and Japan and a slew of major corporate earnings reports.futures hit $79.36 overnight as traders focused on worries over Chinese demand rather than tensions in the Middle East or Venezuela and turned sellers. steadied after a two-week downturn and futures ticked 0.
In Japan a broader range of outcomes is on the table, with markets pricing a near 60% chance of a 10 basis point rate hike and expecting to hear about how the Bank of Japan plans to edge its way out of an enormous bond-buying programme. The dollar and yen were kept in fairly compact ranges and took a breather after recent breakout moves.
"We are at an interesting intersection for yen here," said Nathan Swami, head of currency trading at Citi in Singapore, with this week's central bank meetings possibly sketching a shift in the rates outlook and the yen's trajectory.