Asia equities are positive amid a deluge of earnings results and following on from the FOMC where the Fed declared progress has been made but noted there is still some ground to cover to reach “substantial further progress”. Fed Chair Jerome Powell reiterated its dovish tone, repeating that the timing of the bond tapering will depend on incoming data and that the Fed will provide advance announcement before any policy change. On Wall Street, defensive positioning underperformed. The Tech sector traded flat. China-related stocks outperformed as selling pressures receded with reports that China policymakers held meetings with banks to ease the risk-off outflows.
On the China front, reports note that the country may strengthen housing loan policies in the second half as mortgage rates are expected to continue to climb. On the FX complex, JPY was weaker as US Treasury yields rose, while the decline in the USD sustained JPY off its lows. CNH traded firmer from the softer dollar, also supported by the recent reports that China convened meetings with banks and brokerages in a bid to restore market calm after a stock defeat. For the session ahead, traders will be trading the last days of the month after the FOMC, so punctual volatility and higher volume are expected as participants will be forming the fixing pricing for various asset classes.
