On Wednesday, the Asian shares got repressed with investors wary of any hint of hawkishness from the US Federal Reserve as high asset valuations rely profoundly on the continuous supply of super-cheap money. Another reason for caution was an imminent data dump on Chinese retail sales and industrial production.

MSCI's broadest index of Asia-Pacific shares outside Japan hardly moved, Japan's Nikkei eased 0.2%, whereas the Chinese blue chips fell 0.3%. South Korean stocks rose 0.6% to a record high after five months of effort. Both S&P 500 futures and Nasdaq futures were all but stable. EUROSTOXX 50 futures rose 0.1% and FTSE futures 0.3%. For dealers, caution was the better part. Trading can be irregular around the event as forecasts from Fed members may seem hawkish, whereas the news conference from Fed Chair Jerome Powell sounds dovish. The key will be Fed members' projections, or dot plots, for interest rates and whether tip a hike in 2023. Earlier such a move has been seen only 7 out of 18 times. Some upward movement in inflation projections for this year and the next can also be expected, given the last two readings on consumer prices staggered to the high side.

BofA's latest survey of fund managers hints that most are confident on the outlook. 72% said that the inflation was temporary, whereas 23% saw it as permanent. According to BofA, the investors are bullishly positioned for permanent growth, transitory inflation, and a peaceful Fed taper through longs in commodities, cyclicals, and financials, suggesting that the market was exposed to any hint of Fed hawkishness.