Asian equities opened with firm foot amid tailwinds from Wall Street. Cyclical sectors led the global equity rally. Some price action may have been due to positioning after Quad Witching on Friday. This week, on the technical front, participants will be positioning for the annual rebalancing on the Russell indexes. It is usually the biggest trading volume day of the year. The Fed speak slate is jam-packed this week and was kicked off today by Fed’s James Bullard, who reiterated his hawkish arguments on Friday. Still, he did note that the Fed’s assumption would not raise rates until the taper is complete. As Fed’s hawkish shift has dragged the risk aversion sentiment on global risk assets, FX and Fixed Income earlier this week, it will be interesting to see what others on the FOMC have to say later in the week.
On the commodity front, Crude Oil continued its rally and posted fresh highs yesterday, which could keep supporting the APAC energy sector. In the session ahead, traders will be keeping an eye on the geopolitical concerns with the latest suggestion from reports that the White House is mulling a ban of imports of polysilicon from Xinjiang, an ingredient used in most solar panels.
