Asia open: Chips shine, tape flickers, and geopolitics simmer

Asian equities look set for a mixed open, echoing Wall Street’s tepid gains, where optimism feels more like duct tape than steel reinforcement. Markets are still riding the sugar-rush express from revived U.S.-China trade chatter, even as investors remain deeply mired in a fog of uncertainty—on rates, on tariffs, on the policy path ahead—and now, regional geopolitics is adding a fresh layer of anxiety.

If Wednesday’s U.S. session felt like a drift, Asia is sleepwalking into Thursday—one eye on trade headlines, the other nervously scanning FX screens. Between currency volatility, central bank shadowboxing, and the quiet but jarring tremors between India and Pakistan, the region’s open feels more like risk containment than risk appetite.

Still, the market glue is holding—for now. A sliver of trade thaw optimism between the U.S. and China is enough to keep sentiment from unraveling. But it’s patchwork at best. The S&P’s modest bounce was pinned almost entirely on one old reliable sector: semis. Chipmakers surged in New York on reports that the Trump administration plans to rescind Biden-era AI export restrictions—essentially rolling out the welcome mat for tech again, and possibly offering an olive branch to Gulf and Asian partners along the way.

Traders will be parsing the Bank of Japan’s March meeting minutes—a backward-looking, likely muddled readout that may do little to clarify the BoJ’s next move. Meanwhile, Bank Negara Malaysia could quietly deliver a dovish hold as regional central banks continue to thread the needle between FX stability and growth support.

But the real risk bubbling under the surface? Geopolitical tremors. The India-Pakistan standoff remains tense, and while it hasn’t exploded into rockets flying , it’s a wildcard that could jolt EM assets if it escalates. Cross-border artillery exchanges have been reported, and military posturing continues along disputed borders. Investors aren’t panicking—but they’re watching closely. With the U.S. distracted by tariff theatrics and the Fed frozen in policy limbo, the risk premium for regional conflict could steepen fast if the headlines turn.

Asia’s open may start with a chip-led shimmer, but beneath that, the structural fog persists. With no clear macro catalyst and liquidity still sketchy, expect markets to drift until something—anything—cuts through the haze. For now, it’s masking tape over macro cracks.

Post-FOMC moratorium? One word: Clueless

If the PBOC’s surprise liquidity cannon was meant to give Beijing leverage heading into tariff talks, the Fed countered with... a blank stare. No moves, no shifts, no signal—just a slightly tweaked statement acknowledging economic uncertainty and a press conference that could’ve been copied and pasted from April. Powell must’ve hit “control + wait” 22 times.

Let’s call it what it is: the Fed is flying IFR in zero visibility, waiting for either inflation to spike or payrolls to crack before doing anything meaningful. And while they’ll say they’re data-dependent, they couldn’t even articulate what data they’re waiting for. All we got was a shrug disguised as policy patience.

Markets didn’t exactly panic—because this wasn’t about panic. This was about being lost in the fog. Stocks managed a late-session levitation act, but only after drifting aimlessly most of the day. Long-end Treasuries quietly caught a bid as Powell flagged risks to growth. Gold eased on the fading trade tensions. Oil slipped too, skeptical that “talks” will morph into real resolution. And the dollar? Still carrying the weight of strategic uncertainty, with the front-end anchored by a Fed that’s clearly in no rush to cut.

The most important takeaway wasn’t in the dots or the statement—it was in the silence. Powell said a lot of words, but none of them cleared the air. We’re pricing forward policy with a blindfold on, chasing shadows across both sides of the mandate. One minute it’s inflation fears, the next it’s labor softness. Meanwhile, the FOMC sits on its hands like a trader afraid to re-enter after getting stopped twice in chop.

This isn’t a pivot. It’s a policy pause dressed in diplomatic nothingness. The Fed didn’t blink—but it didn’t act either. And that’s the real problem: we’re heading into a global tariff minefield, with mixed signals on growth, tightening financial conditions, and the most crowded yield curve positioning in years—yet policy is sitting idle, frozen in narrative purgatory.

In trading terms? We’ve gone from reactive to reactive to the reaction. Every rally is conditional, every dip is shallow, and the whole tape feels like it’s balancing on top of Powell’s wait-and-see mantra. It’s not conviction. It’s inertia.

For now, the market is tolerating the ambiguity. But make no mistake: when clarity finally lands—whether it’s in the form of a hot CPI, a soft NFP, or a geopolitical landmine—it’s going to hit like a freight train. Because you can only drift so long before the next move isn’t a repricing. It’s a reckoning.

The view

I’ve been an early riser since my trading floor days, back when I thought being the first one in would impress the brass. It didn’t—but it gave me an edge. While half the desk was rolling in hungover and wearing yesterday’s shirt, I was already caffeinated, briefed, and three steps ahead. Not that I didn’t have my nights out, but let’s just say I knew when to trade the party for the prep.

Fast forward to now, and that ritual’s evolved into something healthier. After two decades of expat indulgence in Singapore—equal parts opportunity and excess—I’ve hit the reset button. These days, I start early, put my thoughts on paper with a pre-dawn NY market wrap, and then head out for a run to clear the fog. But if ever a day in financial markets matched that foggy headspace, it was Wednesday.

This was a session soaked in strategic uncertainty—no clear narrative, no dominant macro thread. Just a thicket of overlapping themes: the Fed stood pat, China lobbed in a tactical stimulus volley ahead of trade talks, and Treasury’s Bessent prepped for a face-off with Beijing’s top economic czar, He Lifeng. There’s progress, technically—but it’s the kind that feels more ceremonial than transformational. A handshake, not a breakthrough.

Powell played it cautious—acknowledging growth risks and inflation stickiness without tipping the Fed’s hand. The result? Market tone was like walking through molasses. Stocks spent most of the day in the red before a last-minute levitation act. Treasuries, meanwhile, caught a quiet bid on Powell’s growth flag, and gold slipped on the hopes (however thin) that U.S.-China tensions might de-escalate. Oil didn’t buy the optimism either, sliding on skepticism that talks would do more than hit replay on the usual diplomatic theatre.

Yet underneath the surface, something constructive is happening—particularly in rates. Bond market liquidity is returning, and that’s not just a footnote. The basis trade is quietly being re-leveraged: hedge funds are nibbling at spreads, and asset managers are stepping back into duration. The notional across two-, five-, and ten-year futures is now comfortably back above the $1 trillion mark. Yields between 3.80% and 4.20% are drawing in long-onlys like bees to honey.

And that’s the part that matters to me. Despite all the noise—China stimulus headlines, soft U.S. data, a Fed that sounds more like a philosopher than a policymaker—the market isn’t buckling. My early-week dollar trades may only be marginally onside post-Fed, but the bigger takeaway is that reflexivity isn’t completely broken. U.S. assets still carry a weighty negative premium, but we’re not in a wholesale flight-from-quality regime. Not yet.

Asia’s Thursday open will be telling—especially in FX. China may have nudged the yuan fix higher, but they’ve been doing that dance for months. What matters more is what follows. Are exporters still converting? Is gold still catching that Asia-hour bid? Those are the smoke signals that tell you whether this rally has a floor or just helium.

In this kind of market, clarity is a luxury. But consistency—that daily grind of writing, running, and staying process-driven—that’s where the edge lives now.