EQUITIES
The broader Asia-Pacific markets struggled for direction in Monday trade. Mainland China’s Shanghai composite slipped 0.11% while in Japan, the Nikkei 225 slipped 0.75%. South Korea’s KOSPI ticked 0.04% lower.
In Hong Kong, the Hang Seng index advanced 1.06%, supported mostly by Chinese tech firms. In Australia, the S&P/ASX 200 gained 0.08%. Singapore’s Straits Times index also climbed 0.38%.
European stocks meanwhile are expected to open positively later today as investors continue monitoring developments in the war between Ukraine and Russia.
OIL
Oil prices fell more than $3 on Monday on prospects of a drop in fuel demand in China following expansion of COVID-related lockdowns in the country. Public transport, including ride-hailing services, will also be suspended during the lockdown.
Brent crude futures were trading down $3.60 to $116.39 a barrel, while the U.S. WTI crude futures hit a low of $109.90 shortly after opening and were down $3.11 at $109.45.
CURRENCIES
Grappled with high inflation and a hawkish US Federal Reserve, the 10-year Treasuries yield was last 2.503%, having jumped 33 basis points last week and surging to nearly three-year highs, and are up a staggering 67 basis points on the month.
The dollar index meanwhile hit a more than one-week high, was at 99.151, with a gain for the month of 2.5%.
The yen extended its stomach-churning descent as the Bank of Japan acted to keep local yields near zero. The Japanese yen has been the major loser as policymakers keep yields near zero and sky-high commodity prices send its import bill ballooning.
In cryptocurrency markets, Bitcoin was sitting steady around $46,860 after jumping to its highest level since early January of $47,524 in early trading. Ether, the world's second largest cryptocurrency, was at $3,314.
GOLD
Gold prices fell on Monday as hopes of progress in Russia-Ukraine peace talks to be held this week dented safe-haven demand for bullion, while a stronger US dollar and higher yields further weighed on the metal.
Spot gold fell 1.15% to $1,935.90 per ounce, and U.S. gold futures were down 0.97% at $1,940.70.
ECONOMIC OUTLOOK
Asian shares and oil prices both slid on Monday as COVID-19 lockdown in Shanghai looked set to hit global activity.
Shanghai's city government on Sunday announced all firms and factories would suspend manufacturing or have people work remotely in a two-stage lockdown over nine days, after the financial hub reported a new daily record for asymptomatic COVID-19 infections. China also the world's largest crude importer.
Risk sentiment however was helped by hopes of progress in Russian-Ukranian peace talks. The next peace talk is scheduled to be held in Turkey this week after President Volodymyr Zelenskiy said Ukraine was prepared to discuss adopting a neutral status as part of a deal.
Investors also look ahead to a series of key economic reports and continue to keep a close eye on the Federal Reserve’s planned interest rate hikes. The key data event of this week will be U.S. payrolls on Friday when another solid increase of 475,000 is expected with the jobless rate hitting a new post-pandemic low of 3.7%. Also due for the week are a bevy of surveys on global manufacturing and readings on U.S. and EU inflation.
