Asian equities could trade on the backfoot following a mixed tone on Wall Street as tech downside was leading on several key reports, chip names AMD and Intel were hit on China phasing out US microprocessors from government PCs and servers. As Tech/AI remains the main theme for equities markets, it is worth watching closely any reports that could affect the sector. It is also worth noting that the EU is also opening investigations into big tech names.
On the macro front, FX is on the radar as a key driver for risk as Yuan was bid after a firmer PBoC fixing overnight and on reports of State-owned banks selling Dollars after the notable weakness seen last week. The Yen was flat despite officials’ warning yesterday as Japan’s top currency diplomat Kanda says have been closely watching the currency moves with a high sense of urgency and will take appropriate steps to respond to the excessive weakness of the yen without excluding any measures. Any further intervention signals could boost the Yen. Top tier data is soft this week as it is liquidity due to the Easter holiday this Friday, so trading could be slow and assets keep trading within small ranges. Looking ahead, the highlight is the Japanese Services PPI and BoJ Core CPI, with traders eyeing any upside as a buying opportunity on the Yen and a downside as buying Nikkei and the Japanese banking sector.
