Asian equities could trade positive after a rally on Wall Street, with Nasdaq and Russell 2000 as outperformers as growth and technology stocks benefited from a pullback in global yields and volatility. Traders will look for these sectors in Asia as they are looking attractive after yesterday’s selloff due to global rate market pressure.
On the macro front, the energy sector could lag after oil prices fell to fresh post-Ukraine lows, with participants looking for details of EU price cap proposals and new China lockdowns, with Chengdu extending lockdowns from tomorrow. Again, price action on the commodity camp saw headwinds from yesterday’s China trade data miss as it posted a narrower surplus than expected with both sluggish imports and exports. Looking ahead, the major event will be the European Central Bank decision, where markets expect a 75-bps rate hike. A hawkish message from the ECB could be a clear driver as participants are again looking at growth risks and deceleration in global economic activity. Participants will also watch the last remarkets from Fed Chair Powell before the blackout period going into the September 21st FOMC meeting.
