Asian markets could trade on the front foot as US equities were firmer with a bias to the riskier sectors despite higher US Treasury yields. The unwinding of hawkish positioning could help price action after Fed Chair Powell provided little pertinent monetary policy commentary.
Some choppy price action could also show a directional move toward tomorrow’s US Consumer Price Index release amid a lack of major catalysts. Traders are also getting ready for the US earning sessions, with major US banks all reporting their latest quarterly figures on Friday. All eyes will be on guidance after higher US yields pricing and an economic slowdown in the coming quarters. On the China front, cyclical could outperform as the PBoC is reported to increase financial support for domestic demand and the supply system. Desks are also pointing towards more easing monetary policy conditions, with the PBoC having room to cut the RRR and key interest rates further this year. Furthermore, see room for a rate cut in the property sector.
