Asian bourses started the trading session subdued, following on from the mixed performance on Wall Street, with US equity easing off record levels. Yesterday’s session in Europe and the US showed that the summer is coming for hemisphere north traders on no macro catalyst and tin volumes. Participants are positioning for the month and quarter-end trades this week.
All eyes will be on Thursday’s US ISMs and Friday’s US Non-Farm Payroll report. The question for the global market is if the US job market will start to show any initial signs of heating after a slightly hawkish FOMC earlier this month. Suppose data confirms the uptrend in the US job market. In that case, players might start to bet on a more hawkish Fed that might hit the global bond, equity, and FX market, as short-term yields could start to move higher. It could change the dynamics of the implied risk-premia between the US/Emerging Markets, and the Greenback could see another leg higher. COVID is also getting more attention for the week ahead after the freshest lockdown measures in some parts of Australia and as the Delta variant begins to pop its head in more corners.
