Asian equities are trading with a moderate upside bias following a downbeat lead from Wall Street after the US ADP Employment Change miss and with more Fed members sound more hawkish. Fed Vice-President Clarida leaned hawkish, stating he expects conditions for raising interest rates to be met by the end of 2022 if US inflation and employment outcomes meet his forecasts. Still, he said that Fed rate hikes in 2023 are entirely compatible with Fed’s framework, which is the Fed’s median view. He also pointed out that the Fed could start a bond tapering strategy by year-end.
The crackdown on the different sectors continues in China, with local reports saying the gaming sector tax should be moderately similar to the traditional industry. COVID worries are on the rise. A spate of resurging cases has made the country’s outlook uncertain. Chinese Vice Premier Sun Chunlan required officials to step up their sense of responsibility and rigorously enforce pandemic control measures. Japan proposed expanding the COVID restrictions to more prefectures as delta variants account for 90% of COVID cases in the Tokyo region. The Yen is weaker.
