Asia equities are trading flat to negative as a broader defensive tone dominated Wall Street trade yesterday. Participants will continue to keep a close eye on safer assets after hawkish FOMC minutes from the December meeting, which pointed to the potential for quicker than expected rate hikes and a more bold, earlier balance sheet reduction.
On the COVID front, traders will continue to scrutinize how the latest Covid-19 developments unfold worldwide as more cases build up and could cause some short-term disruption in the global trade recovery, despite the low rate of casualties. On the macro front, Chinese Caixin Services and Composite PMI data are on the radar as E.M. and D.M. investors will be digesting signs of early Chinese recovery and inflationary pressure ahead next week’s inflation data. Worth noting that the local fixed income market is pricing more easing from the PBoC to stimulate the economy. For the session ahead after a hawkish price action after the FOMC Minutes, traders will be on the lookout for U.S. data with ISM Services, trade balance & weekly jobless claims on the radar. Fed speakers are also in the spotlight with Fed’s Bullard and Daly set to speak.
