Asian equities may face a negative trend as market participants assess Meta‘s earnings, released in extended trading on Wednesday. The company’s shares fell 13% after it reported forward-looking revenue projections that did not meet market expectations, despite stronger-than-anticipated results for the first quarter. Meta expects second-quarter sales to range between $36.5 billion and $39 billion, with the midpoint falling short of consensus estimates. The focus now shifts to upcoming earnings reports from major U.S. tech firms later today, including Alphabet, Microsoft, and Intel, where Meta’s disappointing earnings could heavily influence Asian equities price action today.
Looking ahead, market participants are also preparing for the U.S. GDP advance estimate, during the Federal Reserve’s blackout period before these reports. With expectations of a hawkish stance, investors might adopt a defensive strategy, hedging by buying USD and selling US bonds. This could further impact Asian-Pacific risk assets. Additionally, the U.S. 7-year Treasury note auction will be under scrutiny, especially after this month’s sharp bond market sell-off. As the month ends, portfolio rebalancing flows are expected to be significant. So, on the macro front, all eyes will be on the U.S. data, followed by the Bank of Japan’s decision on Friday. There is speculation about a possible hawkish shift from the BoJ that could alleviate the selling pressure on the Yen, which continues to hit multi-decade lows without any signs of FX intervention.
