Asian equities could trade on the back foot as investors are eyeing major macro data this week and the US earning season. US Nasdaq led the losses in major indices, mulled on by rising US Treasury yields. Today, the tech sector will be in the spotlight as the risk asset weakness extended into the crypto space, with Bitcoin falling back beneath the $40k mark. Also worth noting is that current selling may be positioning ahead of today’s US Consumer Price Index. If it comes in line with expectations, it could trigger an FOMC meeting repricing on rate hikes.
On the COVID front, worries on China show no signs of an easing of cases and the COVID/lockdown policy continues to hit the cyclical commodity demand outlook, seeing Brent settle beneath USD 100/bbl for the first time since mid-March. On the geopolitical front, desks are eyeing an event that could trigger further risk-off price action and potential escalation of the Russia/Ukraine war if confirmed. Ukraine’s Azov regiment reported using chemical weapons by Russian forces in Mariupol. However, an independent journalist noted this was very difficult to verify. The only source saying this so far is the Azov regiment, with no independent/credible journalists currently working in Mariupol.
