Asian equities were lower ahead of a heavy calendar of economic data, including the high-profile U.S. jobs report, which will collide with a closely watched Treasury refunding announcement and policy meetings from the Fed, Bank of England and BoJ to create a non-stop stream of significantly tradable headlines.
Indeed, the markets have a lot to unpack this week, as investors appear to be reluctant to play today, as risk appetite remained fragile, partly due to Israel’s large-scale ground assault on Gaza over the weekend, which drew criticism from several Arab states. However, the conflict did not appear to have any broader spillover effects in the Middle East.
As a result, this sliver of “good news” has eased demand for safe-haven assets as Israel’s military action in Gaza has been more cautious than initially anticipated.
Nonetheless, there is growing concern about the possibility of an excessive tightening of financial conditions amid heightened risk aversion driven by geopolitical factors. The intersection of these two dynamics could have important implications for financial markets and global stability.
