Asian equities could trade mixed after US equities closed lower, with traders digesting recent comments from Fed voters. On the dovish side, Vice-Chair Brainard noted that “it is probably appropriate to soon move to a slower pace of rate hikes”, triggering a dovish reaction on rates that supported equities. But traders kept in mind the hawkish message from Fed’s Waller where he said, “we’re not softening. Quit paying attention to the pace and start paying attention to where the endpoint is going to be”. This comes after a miss on US Consumer Price Index last Friday, with markets betting that the Fed might slow the rate hikes and consider a lower terminal rate, which is currently priced just below 5% (from 5.25% before the data).
On the macro front, traders will be eyeing the latest Chinese activity and employment data amid surging Beijing COVID cases and a mixed Dollar hitting the demand outlook. The Yuan should be in focus as it took a hit after many adverse COVID updates over the weekend. Desks are expecting that as cases start to grow, further strengthened COVID prevention and control measures will be announced. That could keep cyclical sectors in Asia-Pacific stock markets under pressure. Commodities such as Oil and industrial metals could be leading indicators going ahead.