Asian bourses begin sideways following the lacklustre trade in Wall Street, where risk sentiment prevailed hindered by inflationary concerns before the US Consumer Price Index (CPI) today. Assuming the data comes higher than expected, and the market starts to anticipate that inflation is likely to be higher for longer. In that case, Fed’s quantitative easing tapering debate will come back, then interest-rate sensitive assets might become volatile. The data is essential for investors worldwide as the US markets are the primary benchmark for risk assets globally.
On the geopolitical front for the session ahead, the Israeli press noted earlier that a large barrage of rockets was fired at Tel Aviv and several areas of Israel. Hamas says it was firing more than 120 rockets at Tel Aviv and Ben Gurion International Airport. If the situation escalates, the market could start looking for hedges and defensive plays.
