Asian equities could trade choppy as global peers traded without a clear direction ahead of a heavy US earnings session schedule and traders eyeing the Fed Speakers before FOMC’s blackout period on April 23 before the May 4 Fed meeting. On the price action, it is hard to draw any conclusions from Monday’s post-Easter Holiday trade as a limited option and underlying futures volumes weighing on the trade with many European players out for an extended weekend.
This week, it is worth keeping an eye on the correlation between the US Treasury Yield curve and global risk assets as traders could start positioning and unwinding some exposure anticipating a 50bp hike at the next FOMC. Global investors will closely watch commodities and inflation-sensitive assets with recent geopolitical developments and upside in Energy prices. The energy sector in Asia could continue to outperform as oil, gas and consumable fuels outpace energy equipment/servicing names. Looking ahead, Fed speaks on comes from Fed Evans (next year’s voter). Central bankers could drive price action this week at the G20, IMF and World Bank meetings with eyes on Fed Chair Powell.
