US E-mini futures continue to trade a tad heavy at the Asia open, amid a renewal of uncertainty over how quickly states can emerge from lockdowns. However, global stocks are finding support that for now, rising daily COVID-19 cases are staying local and failing to have a global impact. So investors can take some solace in that.
And what is vital for the economy is whether governments reimpose wide-sweeping lockdowns. With the overall count low globally, that's unlikely, whereas proximity, or soft lockdowns, like in Beijing, is more likely.
It has been a relatively limp start to the Asia session, as it seems like investors who have been trading mostly on momentum appear waiting for someone to take charge and shrug off Friday's market weakness
The extent to which the COVID-19 pandemic slows economic recovery could increasingly come into focus. These shifting dynamics are always challenging to equate. Even leading economists who occupy a much higher perch from where to analyze current narrative have no idea how the consumer will respond.
The dollar is trading firm, although coming off Friday's high-water market, as risk sentiment stabilizes in early Asia trade.
Policy guidance in RBA Governor Lowe's speech earlier this morning was consistent with recent comments (i.e., interest rates at current levels for the foreseeable future), but his remarks on AUD were surprising. Lowe said that it is hard to argue that the currency is overvalued. Note that the currency was not mentioned at all in the RBA's June 2 policy decision statement. The AUD was unmoved.