Asian markets started the trading session on the back foot as US equity futures extended on their declines, with sentiment drawn after the wobble in oil prices. The Russian envoy to JCPOA talks said to the BBC that “important news is likely to be released tomorrow”, and significant progress has been achieved. However, unresolved issues remain, and the negotiators need more time to finalise an agreement. The holiday closures in Hong Kong, South Korea and Indonesia also add to the subdued mood. Although slightly positive signs are emerging on the trade front as the US Treasury issued a license to authorise transactions involving securities of certain Chinese military companies. The Treasury General License allows transactions on June 11th.
On Wall Street, US stocks closed lower; a defensive price action pushed all indices on the heading to the closing bell. On the radar for today’s session is the FOMC Minutes that should reinforce the Fed’s dovish tone. Still, traders will be looking at any change in the language that could signal potential quantitative tapering chatter. The most significant tail risk for the global markets right now is sustained inflation, with the second being a bond taper tantrum by the Fed.
