Asian markets might experience choppy and slow price action while await major upcoming data releases

Asian markets might experience a choppy and slow price action as investors await major upcoming data releases, particularly from the U.S., with the Producer and Consumer Price Indices expected to significantly influence risk assets this week. Yesterday, slight hawkish movements were noted as advances in risk assets diminished following the release of the New York Fed’s Survey of Consumer Expectations, which showed an increase in short- and medium-term inflation expectations, thus renewing selling pressure.

However, markets have maintained a risk-on stance for several weeks, as concerns regarding the Fed’s hawkish shift and a slowdown in China’s economy have somewhat diminished. If U.S. inflation data falls short of expectations this week, global risk assets may surge. The week ahead is packed with crucial economic releases and Federal Reserve communications, which are likely to shape market dynamics. Today’s focal point is the U.S. Producer Price Index; a higher-than-expected result could prompt a hawkish response ahead of tomorrow’s U.S. Consumer Price Index and a speech by Fed Chair Powell. Market participants are poised in a ‘wait and see’ mode.