Asia equities track the losses on Wall Street with global sentiment moistened after the terror attack in Kabul and with headwinds from hawkish Fed chatter ahead of the Jackson Hole symposium. Fed’s James Bullard did not show any wavering in his calls for an aggressive tapering timeline. At the same time, two bombings by ISIS at Kabul Airport also resulted in some caution in risk assets.
Attention now pivots on to Jackson Hole, remarks due from Fed Chair Powell. The market will be watching for clues about when and how the Fed will begin scaling back its asset purchases. Traders will be watching to see the extent to which Fed Powell exposes concern on the Delta variant, which may signal a propensity to move cautiously on a taper announcement. On the economic front, traders will be reacting to the local news reporting that the People’s Bank of China has sent stronger signals for loosening credit with another round of RRR cut very likely.
