Themes

• General mood is “risk off”
• Fed’s Powell: Its appropriate to discuss tapering at next Fed meeting
• Mederna’s CEO: The current vaccine may not offer protection against Omicron

What’s Moving

Well, it wasn’t quiet last night! The U.S. market opened to comments from Fed President Powell that it would be appropriate to discuss tapering at the next Fed meeting. This strongly implies a gradual increase in interest rates and saw the Dollar rally to session highs quick smart.

Also supporting the Dollar were comments from Moderna’s CEO warned that the current vaccine may not offer protection against the current Omicron Covid variant. 

U.S. equities took a decent hit after the tapering comments and ended the session weaker across the board.

Thoughts

Given the wide ranges overnight, we can’t really hope to extend in Asia today, but there is some key data due locally that may provide some market incentives.

First us is Japanese Capital Expenditure (E: +1.6%), followed by Australian GDP (E: -2.7%) and Japanese Manufacturing PMI (E: 54.2)> The flag ship release today will be the Chinese Caixin Manufacturing PMI number which is expected to print at 50.5.

Pivot Points