Asian equities could have another choppy session as US equities kept trending lower in yesterday’s session. The USD is a core asset for understanding intraday swings with participants looking for cash. The Dollar Index (DXY) was bolstered and touched a fresh year-to-day high just shy of the 105.00 level due to EUR weakness, while USD/CHF reached parity and JPY outperformed amid the risk-off flows.
On the macro front, traders are keeping an eye on Fed speakers as a swift Committee policy mostly caused recent cross-asset volatility. Yesterday, after a miss in the US Producer Price Index, risk-off flows supporting bond prices, in the forward market, the chances of further rate hikes in the second half of the year receded. It is also worth noting that in today’s sessions, participants will be digesting recent Fed Chair Jerome Powell’s comments. He said he’s prepared to consider larger rate hikes than the 50bp rate increases. After speaking at his press conference last week, the central bank was not “actively considering” a 75bp move.
