Asia equities begin the session sideways despite the late risk-on session on Wall Street after US President Joe Biden said on CNBC that he would accept a lower rate than what he has proposed in his search for Republican support funding. Biden stated that a corporate tax rate between 25% and 28% could help pay his $2.3 tln infrastructure plan. Today’s session in the region is tentative ahead of important data releases, including Chinese trade data, Caixin PMIs, which could support the global manufacturing output PMI that reached 55.8 in April, its highest level in a decade.
The main macro data will be the US non-farm payrolls (NFP). The most important question will be if the US job market and wage growth are recovering faster than anticipated, supporting the reflation trade theme with increasing inflation expectations that are pulling commodity prices higher. On the risk side, recent US-China rhetoric also clouds the sentiment as the top US and Chinese trade negotiators may hold talks soon to review the Phase 1 trade deal. Earlier, there were reports stating that the White House is likely to go ahead with former President Trump’s China investment ban. Meanwhile, yesterday’s announcement from China’s National Development and Reform Commission that it is to suspend all activities indefinitely under the China-Australia strategic economic dialogue mechanism might hold some gains on risk assets in the region.
