Asian equities are trading down as investors pondered the latest U.S. earnings reports and a jump in Australian core inflation that again highlighted intensifying cost pressures in the global economy. Worth paying attention to the Australian bond market as the 3-year yield tops 1.00% after Australian United States Consumer Price Index metrics topped estimates, moving into the RBA’s 2-3% target range. Traders are starting to reprice the RBA’s Monetary Policy stance, which could put more pressure on the short and long end of the yield curve.
On the commodity front, Zhengzhou Thermal Coal futures hit the limit down after dropping 10%, amid China’s continuing crackdown on coal. For the session ahead, traders will be on the lookout for further earnings reports before the all-important US GDP report tomorrow and the US PCE on Friday, before next week’s FOMC and jobs data. There could be enough in the events scheduled over the next week and a bit to shape the near-term trading landscape. The month-end flows should be monitored closely, as traders are hunting for liquidity in the last week of the month, therefore causing some punctual volatility and directional moves on multiple asset classes.
