Asia equities are trading mixed following the similar performance on Wall Street where the major indices were choppy amid Fed tapering signals, COVID Delta variant and growth slowdown concerns. In Australia, New South Wales state announced 642 locally transmitted COVID-19 cases. The State Premier said they will extend the Sydney lockdown until end-September, and facemasks are to be worn everywhere outside. Traders’ focus will remain on the local COVID situation after yesterday’s jump in new cases in the country.
On the trade front, Chinese media noted that the China-Australia trade bubble may burst with iron ore prices returning to a more regular range and as China curbs its steel production to reduce carbon emissions. On the FX front, the USD caught a safe-haven bid while cyclical and high-beta pairs felt the brunt of risk-off flows. Looking ahead, Friday looks set to be a session marked by technical flows ahead of the weekend.
