Asian equities could trade positive as US stocks soared yesterday, with Nasdaq rallying 2%, led by headwinds in Consumer Discretionary and Technology as the large caps were supported by lower US Treasury yields, which led to outperformance in growth vs value. Throughout the day, Desks have been calling the peak in US inflation, and the global market seems to be pricing this scenario as global yields eased after the March US Consumer Price Index data that came below expectations on the core. That was supporting the risk-on price action on equities and in the bond space.
On the monetary policy front, Fed Waller said high inflation in the CPI report was not surprising and is pretty much the peak, while he prefers a 50bps rate hike in May with possibly more in June and July. Geopolitics is very liquid, but the crisis continues to deteriorate. Russia was reportedly positioning for a resumed offensive push and warned that if incursions on Russian territory continue, they will strike places where the decisions are made, including Kyiv. For the session ahead, more US bank’s earnings will be key to see, while the ECB is also in focus, where traders will be mindful of any hints of an early end to Asset Purchase Programme and a potential 2022 rate hike.
© 2019 High Leverage FX - All Rights Reserved.
© 2019 High Leverage FX - All Rights Reserved.