EQUITIES
Asia-Pacific markets traded mixed on Monday. Chinese mainland shares rose, reversing earlier losses. The Shanghai composite was up 0.34%, while the Hong Kong’s Hang Seng Index rose 0.78%
In South Korea, the Kospi index fell 0.90% while in Australia, the benchmark ASX 200 traded 0.08% lower after retracing some of its earlier losses.
Japan’s markets are closed for a public holiday.
European stocks are expected to open in positive territory on Monday as global markets look out for key U.S. inflation data this week and more comment from U.S. Federal Reserve Chairman Jerome Powell on interest rate hikes.
OIL
Oil prices held firm on Monday, helped in part by supply disruptions from the unrest in Kazakhstan and outages in Libya, although the rapidly climbing cases of the Omicron COVID-19 variant raised concerns.
The Brent now traded at $81.83 per barrel, and U.S. crude futures traded at $78.93 per barrel.
On Friday last week, the Brent futures ends at $81.75 a barrel, while the WTI crude oil prices closed to $78.90 per barrel. Both benchmarks ended the week at around 5% higher.
CURRENCIES
The dollar started the week with support as traders bet U.S. inflation data and appearances from several Federal Reserve officials would bolster the case for higher interest rates. The dollar index last sat at 95.948.
The yields on 10-year U.S. Treasury notes also remain elevated, at 1.766% on Monday, having shot up 25 basis points last week in their biggest move since late 2019.
GOLD
Gold was a shade weaker on Monday, hovering near a three-week low as markets weigh quicker Fed hikes.
Spot gold slipped 0.30% at $1,791.60 per ounce, after hitting its lowest since Dec 16 of $1,782.10 on Friday. U.S. gold futures were down 0.2% at $1,792.20.
Spot silver shed 0.505 to $22.29 an ounce, platinum declined 0.29% to $953.70, and palladium traded flat at $1,920.00.
ECONOMIC OUTLOOK
Major share markets were muted on Monday as investors kept an eye on the coronavirus pandemic and rising interest rates in the U.S.
Investors counted down to another U.S. inflation reading that could well set the seal on an early rate hike from the Federal Reserve, lifting bond yields yet further and punishing tech stocks. Last week, minutes from the U.S. Federal Reserve’s December meeting indicated that officials are ready to aggressively dial back policy support. It showed that the central bank is planning to shrink its balance sheet in addition to hiking interest rates.
Elsewhere, surging cases of the Omicron variant of the coronavirus denting sentiment further. Places like the U.S., Australia and U.K. have reported record number of cases in recent weeks.
U.S. consumer price report scheduled to be released on Wednesday is awaited, that will show whether December marked the seventh month in a row in which inflation topped 5.0%. The CPI released last month showed that prices surged 6.8%—the highest level since 1982.
A raft of Fed officials also will be out to offer their latest thinking this week, including Chair Jerome Powell and Governor Lael Brainard who face confirmation hearings.
Markets also will be keeping an eye on security talks between U.S. and Russian diplomats in Geneva on Monday that are aimed at de-escalating tensions over Ukraine.
