U.S. Inflation Has Asia Trader Staying Up With Pizza & Diet Coke

(Bloomberg) -- The prospect of faster U.S. inflation driving a more hawkish Federal Reserve policy this year has investors and strategists in Asia preparing for a long night ahead.

Stephen Innes, Singapore-based head of trading for Asia Pacific at Oanda Corp., is looking forward to some extra fuel while he reworks his trading algorithms after the numbers drop during Asia’s night.

“I will be in office for a pizza and Diet Coke session!” he said in an email, noting that while his New York colleagues can “easily handle our general USD positions,” he will have to be around to manage his “USDJPY book.”

U.S. Inflation Has Asia Trader Staying Up With Pizza & Diet Coke

Chua Han Teng, head of Asia Country Risk at BMI Research, also plans to stay up late. A result above consensus will further encourage expectations for rate hikes, putting upside pressure on U.S. bond yields and leading to even more volatility in U.S. equities, Chua said in an email.

No Popcorn

Not everyone is ascribing the same importance to the incoming data. Kerry Craig, a Melbourne-based global market strategist with JPMorgan Asset Management, said core inflation remains below central bank targets and levels are not yet excessive.

“I don’t think we’ll be sitting up eating the popcorn and waiting for this number to come out,” Craig said. “The trend is firming inflation, it’s nothing more than that.”

“The summary is this market doesn’t really have a clue overall -- which means the price action in the wake of the release will tell us everything,” Bloomberg Macro Strategist Mark Cudmore wrote.

As for Jingyi Pan, a market strategist at IG Asia Pte, it won’t really matter where she is when the data come out.

“The phone follows you,” she said.

©2018 Bloomberg L.P.