Asian equities could trade choppy to negative after heavy losses on global peers in the past two sessions. With a stronger dollar and investors sitting on cash, technical trades will be on the radar as this quarter is coming to an end on Friday. Month-end flows will be hitting the tape in the coming days. For Chinese equities, traders will keep an eye on the Property Sector as rumours were suggesting that China’s national team is buying Chinese stocks. However, traders are waiting for any official news on the matter from official sources. It is worth noting that some positive news flows also were supportive, as China Construction Bank will extend a CNY30bn fund that will be tasked with buying properties from developers.
On the macro front, a new market theme weighing on the FX and also supporting the sell-off in the bond space is the UK’s fiscal plans that dragged the Pound to new all-time lows yesterday. Due to deeper tax cuts and more budgetary support to the fragile economy, the UK curve sold off and pushed global yields higher. Participants will also be paying attention to any commentary from policymakers, with Fed’s Bullard, Kashkari, Evans, and Chair Powell scheduled for today. Whilst the key datapoint of the week is US PCE on Friday. Investors question if the Fed will be able to deliver a ‘soft landing’ or if risk assets will have to price a recession risk fully.
