Asian equities could trade choppy ahead of key central banks decisions this week. On Wall Street, there was not a clear bias on risk, but defensive sectors underperformed with the USD and US yields lower in thin trade amid positioning into Wednesday’s FOMC and updated Dot Plot. Where traders will be looking for hawkish or dovish signals from the Fed. It is worth noting that a report that had traders’ attention yesterday stated that Fed Chair Powell axed his initial Jackson Hole speech to rather be more hawkish over concerns investors were misreading the Fed’s intention.
On the macro front, the Yuan was weaker on renewed geopolitical chatter after US President Biden confirmed that US troops would defend Taiwan “if in fact, there was an unprecedented attack” from China. Nevertheless, there were uplifting developments on COVID after the city of Chengdu exited its lockdown, with 21mln people now allowed to leave their homes. For the session ahead, traders will firmly watch the slew of DM and EM central bank decisions/projections, headlined by the Federal Reserve on Wednesday. Positioning for the event will drive price action on risk assets.
© 2019 High Leverage FX - All Rights Reserved.
© 2019 High Leverage FX - All Rights Reserved.