Asian equities might trade in the red as US stocks sold off throughout the session in another session led by the upside in US yields weighing on the rate-sensitive large-cap tech stocks. The Fed minutes were hawkish, with the $95bln monthly caps on Treasuries and MBS towards the top end of a wide range of expectations of $100bln. The Committee language on interest rates was also hawkish, where many would have preferred a 50bps move in March, but Ukraine war saw them move in 25bps instead. The market pricing has been increasingly looking towards a 50bps move in May (currently 85% priced), while future hikes on 50bps are “data dependent”.
The hawkish repricing could be the major driver for today’s session with a macro calendar light. Participants might recess what is currently on the table for the upcoming Fed meetings. The dollar briefly touched a fresh YTD high in the wake of the minutes, with participants eyeing 100 in the DXY as resistance. On the commodity front, volatility is still driving the price action as Crude sold off heavily on reports US allies are to release 60mln bbl of oil to help ease prices, which will be on top of Biden’s 180mln bbl announcement recently.
