Asian equities could trade lower after another backfoot session on Wall Street. However, the major global equity indices nursed losses throughout the session and finished off their lows with month-end rebalancing on the radar.
On the macro front, it is worth keeping an eye on the USD as EUR is getting a considerable bid after a hawkish pivot from the ECB this week. ECB President Lagarde indicated positive rates once Q.E. ends, while some other ECB speakers started to hint a 50bp hike in July is appropriate and should not be ruled out as a 50bp move. The major risk event in the session is the FOMC Minutes, as traders will be looking for further debate on the terminal and neutral rates. Fed Funds implied hikes are trading near lows, just about fully pricing the 2x50bps guidance (cumulative 100bps for July). Traders will be keeping an eye on Vice Fed Chair Brainard’s comments tomorrow before the FOMC minutes.
