Asian equities could trade on the backfoot as global equities closed down amid the broad risk-aversion as China’s COVID infections caused worries and European gas glooms added to the headwinds for the global growth outlook. The biggest winner is still the USD, as the dollar index (DXY) extended to its highest level since 2002 owing to the risk-off mood.
For the week ahead, traders will be waiting for the start of the earnings season in the US, with financials and banks the early focus. Just over 5% of the S&P 500 by market cap is due to report. On the macro front, the risk asset trade could be choppy as desks are waiting for the latest US Consumer Price Index reading this week. Yesterday the White House Press Secretary noted he expects new inflation data to be “highly elevated” as markets are currently following the data-dependent guidance from the FOMC.
