This Week's Market Outlook: Adjustments Expected with Focus on Dollar Buying Retracement

This Week's Market Outlook: Adjustments Expected with Focus on Dollar Buying Retracement

At the start of the week, the market continues to show signs of adjustment following last weekend's US employment data. While there hasn't been a significant change in expectations for a soft landing in the US economy, the rise in US bond yields is affecting the stock market, creating conditions for adjustments. Notably, the Hong Kong Hang Seng Index has seen selling pressure as policy expectations seem to have subsided. Attention should also be paid to how the Shanghai Composite Index reacts at the close.

Furthermore, tensions in the Middle East persist, leading to renewed market interest in geopolitical risks. With important economic indicators such as the US Consumer Price Index (CPI) and Producer Price Index (PPI) set to be released later this week, the environment remains conducive to adjustments.

Trading Strategy

Considering the buildup of dollar buying, I anticipate a likely retracement in dollar buying before the US CPI announcement on the 10th. Therefore, my strategy is to aim for dollar selling during the adjustment phase leading up to the 10th.