Asian equities markets could feel the ‘taper tantrum’ price action that drove the US and global equities to a deep red territory on Wall Street after hawkish comments from Fed Chair Powell. He said it is a good time to retire “transitory” for inflation and that transitory means not leaving a permanent mark on prices. Fed Powell also noted that the FOMC will investigate accelerating a taper in December, bringing an end to the asset purchase program in 2022. Global growth stocks fell most sharply, so that price action should also weigh on Asia peers.
On the COVID front, yesterday comments from Moderna CEO also weighed on the sentiment and risk assets. Traders will look for new insights regarding the new variant and its impact on the current vaccine framework. In the US session, there were some positive reports on virus treatment. It noted that COVID antibody cocktails lose efficacy against the Omicron variant. For the session ahead, participants will start trading the last month of the year, with some USD demand on the radar and some volatility on the US yield curve as markets will start to reprice the next year scenario for growth and inflation. On the data front, regional PMIs and private Chinese PMIs will be on the radar. For the energy sector, all eyes are on COVID related headlines and OPEC meetings that will start today.
