Themes

· General mood is “risk off”

· U.S. market focus on Chinese Covid numbers

· Fed’s Evans comments were seen as mixed

What’s Moving

It was a quiet session in Europe overnight, with markets gyrating backwards and forwards after a softer open for European equities. U.S. players then came in and focused on the continued rise in Chinese Covid cases, which hit oil the hardest out of the chute.

Later trade then saw yet another rise in U.S. yields, which weighed on U.S. stocks and provided support for the Dollar against most of the majors.

Fed’s Evans was mixed, noting that higher prices will persist, but the Fed needs time to return to neutral rates.

Thoughts

A mixed session overnight, with the finish being broad USD strength. Expect consolidation in Asia today, although t risk remains to the upside. Watch out for potential intervention by the BoJ on the USD/JPY with it reaching a fresh seven-year high overnight.

Data today sees:

· Japanese Bank Lending (E: +0.5%)

· Japanese PPI (E: +9.2%)

· Australian NAB Business Confidence (Last: 13)