Asian equity markets may experience downward pressure as liquidity concerns and end-of-month trading dynamics impact short-term price movements. It’s important to highlight the absence of a dominant market theme at present, with cross-asset volatility at low levels and U.S. equities remaining resilient, avoiding a 2% drop for over 100 days.
Traders are keenly awaiting further guidance from Federal Reserve officials and key economic indicators from China, along with ongoing discussions around fiscal policies. The upcoming US Personal Consumption Expenditures (PCE) index release on Good Friday merits attention, especially in light of recent data indicating a resurgence of interest in the U.S. dollar among hedge funds and institutional investors. This renewed interest could signify a pivotal change in the risk asset landscape.
In the upcoming trading session, the focus will be on rebalancing and fixing trades, particularly involving the Euro, Japanese Yen, and Chinese Yuan. These activities underscore the complex relationship between corporate demand and month-end financial adjustments. This period is marked by increased trading volume and directional bets, impacting both the bond market and sector rotations within equities.
