Asian equities could trade choppy amid a sideways trade on Wall Street, where the risk-off tone was the major driver. The sentiment was hit after geopolitical comments from Russian President Putin, noting that Russia considers nuclear weapons a response to an attack. The theme is not a major concern, but price action deteriorated after Putin’s comments, where US bonds went bid and equities sold off. The pattern creates a trading playbook in case of any escalation from Russia.
As investors are now keeping a close eye on China’s COVID status, stories around the economy reopening and COVID infections will keep driving short-term expectations. Traders will look for more concrete signs of activity in the region to increase or decrease exposure to the Asia-Pacific risk assets. It is also worth noting that a grey global economic outlook for the coming quarters will also weigh on the region. Fresh reports of weakening demand outlooks for Apple and Tesla added to investor worries about global growth tendencies, despite China’s COVID-Zero policy easing. On the macro front, a very light data calendars today, with investors now turning the focus to the Chinese Consumer and Producer Price Index due on Friday.
