Here is an interesting piece while we await Asia markets to kick off more fully for the day.

• The COVID-19 pandemic indeed led to an unprecedented shutdown of international air traffic … China is the only country that deliberately chose to keep its air space nearly closed to foreign flights.

It’s a long piece and the China impacts are towards the bottom. The data appears to be up to April, but with little change in China’s zero COVID policy the impacts are likely still evident.

In the aftermath of the Fed yesterday, the dollar fell and risk trades rallied strongly after Powell & co. signaled that they might be getting close to slowing down the pace of rate hikes. He did not rule out a 75 bps rate hike in September but made clear that perhaps they can seal the deal by being less aggressive now that they reached neutral territory and that the economy is slowing down.

A more data-dependent approach means that markets will have to fill in the blanks themselves. And the first big data to look at will be the US Q2 GDP data later today. Powell said that he hasn’t seen the numbers yet but provided a caveat in saying that any initial figures tend to be revised (though can work in either direction).

The dollar is steadier today but is finding itself struggling against the yen as the Japanese currency is the top performer going into European morning trade. USD/JPY is down 0.8% to 135.45 with the low earlier touching 135.11, coming close to test the critical 135.00 level.

Looking ahead in Europe, German inflation will be a focal point with the North Rhine Westphalia report earlier here suggesting that we might see the figures come in hotter than expected.

0900 GMT – Eurozone July final consumer confidence
0900 GMT – Eurozone July economic, industrial, services confidence
1200 GMT – Germany July preliminary CPI figures

That’s all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.

The Hong Kong Monetary Authority has increased its base rate by 75bps to 2.75%.

An as expected move following the FOMC decision Wednesday US time.