Asian bourses traded indirectly following the flat performance of US peers as caution remained ahead of the Fed’s meeting and amid a deluge of US corporate earnings, with big techs on the radar for the week. Markets will be paying attention to the numbers to see any surprise for the quarter. Still worth looking for clues on how the overall market will be positioned in the coming weeks with rotation into value and cyclical companies strongly continuing in the playbook for this quarter as the vaccine rollout accelerates on majors economies. Hang Seng and Shanghai Composite were choppy. The focus was also centred on corporate results, with Chinese participants bracing for an influx of earnings releases. Asia’s top oil refiner, Sinopec, posted a 19.15 bi yuan loss during first-quarter profit from a loss a year earlier under international accounting standards, as the coronavirus pandemic hammered fuel consumption. Sinopec’s results could be different for the coming quarters as the major economies will likely start to reopen. Nikkei 225 traded sideways owing to their softer FX. The mixed price action reflected pre-FOMC prudence with participants selling US bonds overnight and during the European session. Meantime, stronger than expected Japanese retail sales and earnings releases have supported the risk appetite in Tokyo, with Fuji Electric and Osaka Gas among the biggest gainers after both reported a jump in Fiscal Year net.
Stocks trades mixed, Treasuries little changed on Wall Street, and the Dollar Index lower after the FOMC held to the dovish lines, and Chair Powell pushed back on early quantitative easing tapering expectations. More broadly, there was a dovish price action to Powell as he said it was too early to think about QE tapering. US Treasuries bonds reverse earlier losses: simultaneously, US stocks moved higher, though eventually faded into the closing bell. Ahead of Thursday’s Advanced GDP data, Amazon earnings and Friday’s PCE print, traders will be keeping an eye on Biden’s tax-funded fiscal program to be revealed early today. However, many of the details have already been released, and traders are taking it with a big pinch of salt, given the significant political difficulties it will require to pass.
