Asian equities started sideways after mixed trade on Wall Street

Asian equities started sideways after the mixed trade on Wall Street amid an unwinding of inflation hedges, approaching quadruple witching today. Central banks are still on the radar for the Asian participants as The Bank of Japan is expected to maintain rates at -0.10% and the Japan 10-Year Bond Yield target at 0.0%, which has a threshold band of +/-25bps. BOJ also might extend the September deadline for the pandemic-relief programme. Furthermore, Governor Kuroda could reassure that the Japanese Central Bank will lag the Federal Reserve in ending emergency support to hint that a weak economy and moderate inflation will hold any exit from its ultra-easy monetary policy.

Today’s macro calendar is soft, so position squaring and roll activity in stocks is likely to dominate price action during the Asia session and the positioning ahead of the quad-witching during the US session. The “Quad-Witching” is a quarterly market event that occurs when options and futures on indexes and equities expire. As of note, there are more than 2 trillion dollars of stock index futures, stock index options, stock options, and single stock futures expire simultaneously. This major technical event may open the door for turmoil due to market positioning, dealers hedging, including speculative traders to profit from the event.