Asian bourses are trading on the right foot after the gains on Wall Street, where risk sentiment improved after better-than-expected NY Fed Manufacturing data and led by the energy sector as oil benchmarks surged almost 4%. Energy stocks were prominent outperformers as oil benchmarks rallied after deeper-than-expected inventory draws post-Hurricane Ida granting tailwinds.
In China, traders pay close attention to the fixed income complex as S&P downgraded Evergrande and subsidiaries to “CC” from “CCC” on depleted liquidity; bonds are to suspend trading in today’s trading session.
On the geopolitical front, tensions surrounding North Korea’s latest missile tests continue to boil as some desks could look for some protection ahead of busy trading sessions in the global markets. The DPRK fired two missiles yesterday, which landed within the exclusive economic zone of Japan. Participants will be looking for liquidity ahead of Friday’s Quadruple Witching” (quarterly expirations for stocks and stock futures), so price action is possible as part a function of the trade flows related to those expirations.
