Asian equities could trade higher with the risk demand improving further after the FOMC minutes, which didn’t include any hawkish or dovish surprises but asserted there was no mention of 75bps, and global stocks went bid after the risk event was out of the way. The U.S. short-term interest rates futures implied hikes have fluctuated negligibly after the FOMC minutes but are intact, with 52bps for June and 99bps for July meetings. Now, focus on the US PCE figures on Friday, which will be key to gauge further Fed expectations, as will inflation prints going ahead.
On the macro front, traders are keeping an eye on China as the Yuan was the weakest performer amid comments from Chinese Premier Li Keqiang. He warned the world’s second-largest economy is doing worse in some ways than when the pandemic first hit in 2020. Also, Beijing registered more Covid cases, and the nearby port city of Tianjin locked down a city-centre district driving the offshore Yuan to break a four-session advance.
