Asian stocks are trading positive following a risk-on day on Wall Street after easing geopolitical tension over Ukraine after Russia declared it was withdrawing some forces from the border. The Energy sector was the worst-performing, with WTI and Brent trading lower during the U.S. session; WTI traded around $92. Due to increased geopolitical tensions, it is worth keeping a close eye on the sector due to its hedging demand in the last day. The Oil stocks and futures were the best picks from traders to hedge against any escalation.
On the commodity front, reports that could add to the sector’s downside as local reports state that China will continue to guarantee sufficient supply and stabilize the prices of commodities to ease the increasing costs on the downstream business sectors. Traders are expecting a cool on China’s CPI and PPI later today. Participants will also be watching the latest FOMC Minutes, looking for clues that could support a frontloading of the yield curve in the March meeting, with a 50-bps hike. Although markets are all fully priced for 25 bps, some yield premia are seen for 50 bps.
