Asia stocks are trading sideways after a smooth performance on Wall Street, where S&P 500 and Dow Jones recovered from the initial data-triggered selling to post a 5th consecutive record close. Safe haven currencies have faced some mild headwinds. Participants are paying close attention to the Afghanistan situation. However, it’s not clear the broader market implications aside from the impact on EMFX/credit markets in the region. However, in the U.S. session, there was a soft defensive price action across global markets.
On the economic front, China’s State Council vowed to prioritise employment while anchoring fiscal and monetary policies and requested all departments to “increase cross-cyclical policy adjustment”. China’s crackdown continues and might keep the sector under pressure as China market regulator issues draft regulations on banning unfair competition in the internet sector. Economic growth revisions in the APAC region are rising as COVID Delta variants spread weights in the economies. Japan’s government confirmed seeking an extension of the coronavirus emergency in Tokyo to September 12th and extending it to seven further areas. For the session ahead, traders will be keeping an eye on the U.S. data looking for any signs of ‘substantial further progress’ in the economy. U.S. retail sales & industrial output will be critical, and Fed’s Chair Powell is set to deliver remarks.
