Asian equities are trading higher after a positive risk tone on Wall Street as US Consumer Price Index (CPI) in July didn’t stoke any ‘runaway inflation’ concerns and supported those who claimed that inflation was transitory. The US dollar held a decline following lower US Treasury yields. In the US equity markets, the cyclical and value sector maintained its outperformance.
On the COVID front, worries with more restrictions are still on the investor’s radar. Growth expectations in the region will likely take a hit in the coming weeks. The recent virus resurgence will probably slow the economic recovery, and it could ease the participants’ appetite for value and cyclical sectors exposure. South Korea reported 1,987 new cases in the past 24 hours. The Finance Minister was on the wires earlier, saying the likely economic effect of the fourth wave of the pandemic will be “inevitable” starting in August. Whilst in Australia, three extra local government areas will face increased restrictions in Sydney.
