EQUITIES
Shares in Asia-Pacific were mixed in Monday trade, as investors reacted to the release of China’s latest benchmark lending rate.
Hong Kong’s Hang Seng index, which rose more than 1% in early trade, pared gains and slipped to negative territory as it hovered 0.76% lower. Trading in the Hong Kong-listed shares of China Evergrande and its property services and new energy vehicle unit was halted on Monday, according to exchange notices. No immediate reason was given for the trading halts.
Mainland Chinese stocks were also lower, with the Shanghai composite was down 0.12%. The S&P/ASX 200 in Australia sat 0.22% lower while South Korea’s KOSPI shed 0.34%.
Markets in Japan are closed on Monday for a holiday.
OIL
Oil prices jumped $3 on Monday, with Brent above $110 a barrel, as EU nations consider joining the U.S. in a Russian oil embargo, while a weekend attack on Saudi oil facilities caused jitters.
Meanwhile Russia-Ukraine talks appeared to yield no sign of progress, and markets continued to fret over tight supply — sparking a call by the International Energy Agency to reduce oil demand.
Brent crude futures jumped 1to $111.36 a barrel, and the U.S. West Texas Intermediate crude futures climbed to $108.29 a barrel.
CURRENCIES
Bond markets were braced for more hawkish language from the Federal Reserve with Chair Jerome Powell speaking on Monday, and at least half a dozen other members through the week.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 98.369 — off its recent peak at 99.415 seen recently.
China kept its benchmark interest rate for corporate and household lending unchanged on Monday, as expected, although analysts say the case for monetary stimulus is building amid mounting external risks to an already slowing economy.
China’s 1-year loan prime rate was kept unchanged at 3.7% on Monday, while the five-year LPR remained at 4.60%, largely in line with expectations. Investors have been watching for hints of policy support from Beijing following a Chinese state media report last week that signaled support for Chinese stocks.
In cryptocurrency markets, Bitcoin was slightly softer at $41,000 and ether at $2,850.
GOLD
Gold prices rose on Monday, lifted by safe-haven demand as the Ukraine crisis showed no signs of abatement, although the gains were capped by the U.S. Federal Reserve's plan of aggressive measures to combat inflation.
Spot gold was hovering near a two-week low it hit last week at $1,923.70 per ounce, while the U.S. gold futures were down 0.26% to $1,924.30.
Palladium, used by automakers in catalytic converters to curb emissions, gained 2.69% to $2,560.00 per ounce. It had hit a record high of $3,440.76 on March 7, driven by fears of supply disruptions from top producer Russia.
Spot silver was up 0.15% to $25.12 per ounce, and platinum slipped 0.24% to $1,033.40.
ECONOMIC OUTLOOK
Share markets were in a sober mood on Monday as fighting in Ukraine raged on with no sign of stopping, leaving investors clutching at hopes for an eventual peace deal, while oil prices climbed anew as supplies remained tight.
Investors continuously monitored diplomatic efforts to bring an end to Russia’s almost month-old war in Ukraine, while also waiting to see if Russia would meet more interest repayments this week. It must pay US$615 million in coupons this month while on April 4 a US$2 billion bond comes due.
A series of speeches by Fed policymakers this week, kicked off by Powell on Monday, could provide some clues. At least one Fed speaker is due each day this week and Powell himself making another appearance on Wednesday. While U.S. President Joe Biden due to attend NATO emergency summit in Brussels on Thursday.
The flash manufacturing PMI surveys from major countries also would be a hurdle for this week.
