Asia equity markets started the session weaker on month-end and with US equity futures pressured in the wake of disappointing Amazon revenue and forward guidance. While in Japan, the Yen is moderately stronger as macroeconomic data earlier reported the unemployment rate for June was slightly better than estimates at 2.9%, while industrial production for June increased above expectations at 6.2%. Maintaining the trend of better-than-expected data, the Japanese retail sales for May rose 3.1%, contrasted to 2.7% expected.
On the COVID front, traders could be sensitive to the risk related to COVID restrictions as reports that the Japan Economic Minister proposed adding the state of emergency declarations to Osaka, Saitama, Chiba and Kanagawa today. In Australia, the army is to enforce a lockdown in Sydney after the recent record daily COVID-19 cases, and state authorities said the outbreak is likely to be worsen. On the metals front, China is to alter export tariffs for some steel products as of August 1st. It will lift export tax rebates for some steel products. Participants now look to today’s US PCE price index figures which are expected to outstrip predictions. Although with recent mixed US macro data and a dovish FOMC of yesterday, low volatility is expected around the release. Worth paying attention to the levels of liquidity as traders will be positioning for the last session of the month.
