Asian equities may exhibit mixed trading behaviour as global stocks continue to navigate the downward trajectory initiated in April. This trend was particularly pronounced in the last two US trading sessions, which saw a marked bear-steepening in Treasury yields. This volatility in yields may partly stem from strategic positioning for the second quarter, compounded by escalating oil prices. On the flip side, stocks and currencies tied to commodities might reap benefits from the ongoing rise in oil and metal prices, including gold.
The Asian electric vehicle and technology sectors might face headwinds, especially as Tesla‘s influence weighed heavily on the Nasdaq following less-than-stellar first-quarter delivery figures. The semiconductor industry also encountered hurdles, further dampening market sentiment. Market participants are now shifting their focus to forthcoming economic data, such as the US ADP employment report and the ISM Services index. Speeches from various Federal Reserve officials, notably including Chair Powell, are eagerly anticipated for their potential insights into the Fed’s economic perspective. Additionally, attention will turn to the latest Chinese Caixin services PMI, which may offer a glimpse of a positive near-term outlook following China’s robust fiscal and monetary support in the first quarter. Nonetheless, the primary focus for many remains on the imminent US employment report for March, which is anticipated to reveal a job increase of +205,000. Price action is already showing some hawkish tilt, USD and US yields should be monitored closely.
