Asian equities could trade sideways after a missed performance on Wall Street, with some risk demand slowly appearing in risk assets. It is worth noting that the stagflation debate continues to dominate the talks among market participants as the recent disappointing Chinese data stoked growth worries. The disappointing China data supported US Treasuries throughout the session, which added more fuel to the fire after some desks cut their US growth forecasts for 2022.
However, traders are also eyeing some high-frequency asset indicators to gauge any positive developments from China. Oil prices are climbing amid optimism regarding the COVID situation in Shanghai, with authorities stating that restrictions are starting to ease from 1st of June after an extended lockdown. On the lookout, today turns to US retail sales, a plethora of Fed speakers, namely Chair Powell speaking, and Bullard, Harker, Kashkari, Mester, followed by Evans after the US close. No surprises on guidance are expected, but some pushback on a more aggressive tightening might be back on the table.
