Asian equities might trade positive after continued risk-on price action on Wall Street as worries with the Omicron variant fades. US NIH’s Fauci said early cases of Omicron seem to show fewer hospitalizations and less need for oxygen, but still need more data. In the region, cyclical names as commodity-tied companies could outperform after a strong Oil rebound and with the PBOC easing its policy cutting RRR and the global appetite for risk assets ahead year-end.
Worth noting that cross-asset volatility made a reasonable pullback after the risk-off flows last week. Traders could now focus on inflation dynamics and the supply chain issue caused by the multiple waves of COVID infections. Global central bankers are worried about inflationary pressure impacting growth and the job market for the year ahead. Markets have been pricing a hawkish reaction from the FOMC earlier than expected, and it could impact risk assets in the coming days as the Fed is set to signal some hawkish bias in its meeting next week. Highlights include Elsewhere; participants will be watching the Japanese Final Q3 GDP, which could print as the expectations as growth has been revised lower in the last quarter with the Delta variant impacting global economies. No major impact on local assets will be expected. There may be comments from RBA’s Lowe and JOLTS data from the U.S.
