Asian markets could trade mixed with price action relatively range-bound amid higher US Treasury yields, dollar strength, defensive demand, and positioning flow driven by US corporate earnings. It is worth noting that the current trade is highly technically driven by different market participants before major Central Bank meetings in the coming weeks. The FX and bond market are positively correlated due to month-end price action and traders’ positioning ahead of next week’s potential prominent FOMC meeting.
Traders will now keep an eye on the Bank of Japan meeting later today. Bank officials stated that current inflationary pressures are cost-push, not demand-pull related. Desks expect the BoJ to leave its monetary policy instance unchanged. Later today, traders will be eyeing the EU flash CPIs from Germany and Span. US data on the radar will feature Q1 Advance GDP. On the US earnings front, Amazon and Apple could bring some volatility to the equity space.
