Asian bourses started the session trading sideways after a similar indecisive performance on Wall Street. The lack of an important catalyst has participants looking towards the key events later this week, including the European Central Bank monetary policy decision and the United States Consumer Price Index (C.P.I.). The Street scrutiny is warm after last month’s big upside surprise, which caused a slight downside to the equity complex globally and gave some support to the greenback as U.S. Treasury yields and Inflation Breakeven moved higher. The C.P.I. reading is the most important data point before the F.O.M.C. meeting next week.
On the trade front, the wires are reporting that the U.S. is reportedly planning trade talks with Taiwan which are likely to add to rhetorical tensions with China. The piece is citing comments from U.S. Secretary of State Antony Blinken. Another risky piece hitting the tape is a source report stating that the U.S. government national laboratory concluded that the hypothesis claiming the virus leaked from a Chinese lab in Wuhan is plausible and deserves further investigation. As the market is heading to the final month of the semester, some participants could opt for defensive plays to hedge their exposure if U.S./China themes escalate in the coming quarters.
