Asian equities could trade choppy to defensive following a volatile trade on Wall Street after the hawkish central bank wave in which the ECB hiked key rates by 75 bps, and a report noted that another 75 bps in October could be real. Is it worth noting that this report from the ECB dragged down global equities, showing that the growth and rate sensitivity trading environment is not over. This hawkish activity could keep pressuring risk assets in the coming days ahead of the US Consumer Price Index next week and the next Fed, on September 21st.
In China, the tech and semiconductors could be under pressure as China’s Shenzhen and Guangzhou have postponed two semiconductor events scheduled for September as the cities step up restrictions to contain the spread of COVID-19. So defensive flows might hit the tape as reports noted that the German Economy Ministry could be looking at steps to make the trade with China less attractive and lower strategic dependency. At the same time, measures could include lowering investment and export guarantees, trade fairs and state loans. On the data front, participants will focus on the Chinese Consumer Price Index for August to gauge the effects of recent COVID lockdowns, with some being extended more recently in September.
