Asian markets could trade positive with global sentiment continuing to improve for risk assets. Wall Street rallied and this surge was primarily influenced by a lower yield environment, following the Bank of Japan’s (BoJ) decision to maintain its current policy stance.
It is worth noting that price action is also influenced by liquidity dynamics amidst thinning holiday trade, as market participants began winding down activities in anticipation of the upcoming year and the US Core Personal Consumption Expenditures (PCE) data release. Traders are now looking ahead to various economic indicators and policy statements and the People’s Bank of China (PBoC) Loan Prime Rate (LPR). On a macro note, the change in the dollar’s seasonal effects seems to be also driving risk appetite as the US Dollar was sold off hard against a basket of currencies. Market participants continue to monitor the evolving geopolitical landscape, particularly the situation in the Red Sea, which is likely to impact crude oil prices and broader market sentiment in the coming days.
