Asian equities could trade positively after a positive session on Wall Street after a dovish comment from Fed’s Bostic where he noted that the Fed potentially being able to pause mid-to-late summer, alongside some pushback on a 50bps hike.
The investors’ positive sentiment with Chinese equities could continue as late yesterday, China stated it would invest $1.9bn into its top chipmaker, as boosting technology innovation locally is seen as a key policy goal. If the February Caixin services PMI prints come better than expected, more headwinds for risk assets could come. Desks are looking for a hot number of 54.5 versus 52.9 prior. Also on the radar for cyclical sectors, participants will be watching closely the upcoming National People’s Congress, which kicks off this weekend. A GDP target closer to 6% for 2023 would be a relative surprise, as most desks expect somewhere between 5.00-5.50% for this year’s growth target. That could add to a risk-on trade going to the next week’s trade.
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© 2019 High Leverage FX - All Rights Reserved.