The Asian equities market is anticipated to exhibit a mixed trading pattern, influenced by factors such as economic data, company-specific news, and earnings reports. Participants will react to the recent announcement and forward guidance for the next quarters, which may lead to repositioning and varying trade outcomes. Additionally, traders will adjust their exposure to equities in light of this Friday’s options expiry in the US, coinciding with the ongoing earnings season and impending critical central bank decisions next week. In the foreign exchange market, the pound sterling experienced a significant decline following its first inflation miss since January, while the US dollar managed to recover some of its previous losses. Commodity-related stocks, especially grains, may benefit from favourable market conditions, with particular attention on wheat. This is due to Russia’s recent declaration that any vessel heading towards Ukraine’s ports would be perceived as a military threat starting from July 20.
Several upcoming events deserve attention, including earnings reports, US jobless claims data, and the Philadelphia Fed manufacturing index. Furthermore, market participants will closely monitor the People’s Bank of China (PBoC), as it is expected to maintain its lending benchmarks unchanged after holding its key policy rate steady earlier this week. However, with the economy showing signs of rapid deterioration, there are growing expectations for additional stimulus. If the PBoC surprises the market with a rate cut, it could be viewed positively, especially in light of the recent pessimistic outlook on China’s economy following a disappointing GDP reading.
