Asian equities are trading green amid tailwinds from global peers, including the best day for the S&P 500 since March as solid earnings, supporting macro data and a decline in US Treasury yields drove risk appetite. Worth paying attention to the US yield curve dynamics. If the participants keep adjusting their inflation positioning and rate pricing, it can push the USD higher against G10 and EMFX pairs. An inherent rise in the US Dollar could weigh on EM risky assets, especially equities and bonds.
Today, there’s a limited session for data in Asia. In the US, traders will be paying attention to the inflationary aspect of the Retail Sales data for September. University of Michigan Consumer Sentiment Index preliminary data for October could also draw focus as inflation worries grow amid consumers and companies. Ahead of the November FOMC meeting, Fed’s Bullard, Harker and Williams are also due to speak. Participants will be paying attention to the inflation rhetoric. Worth noting that the US Money Market already expected a rate lift off pricing by the Fed as soon as September 2022, vs December 2022 a month ago.
