EQUITIES
Shares in Asia-Pacific were mixed in Friday trade, as investors remains wary of geopolitical and economic uncertainty. Hong Kong’s broader Hang Seng index shed 0.72%, while in mainland China, the Shanghai composite rose 0.62%
Chinese tech stocks in Hong Kong saw sizable losses, with Alibaba falling 3.93% and Baidu plunging 6.01%. JD.com shed 3.25% while Meituan slipped 1.03%. The Hang Seng Tech index declined 1.71%.
Elsewhere in Asia-Pacific, the Nikkei 225 slipped 0.52% while in South Korea, the KOSPI index was down 0.75%.
Australia’s S&P/ASX 200 and Singapore’s FTSE Straits Times index hovered fractionally higher.
OIL
Oil prices dropped on Friday on U.S.’s announcement on a record-breaking release of reserves crude oil while OPEC+ stuck to its existing output deal. Traders also awaited the IEA meeting to also discuss its new release of emergency oil reserves.
U.S. President Joe Biden on Thursday announced a release of one million barrels per day for six months starting in May. That will be the largest release ever from the U.S. Strategic Petroleum Reserve (SPR).
The OPEC+ meanwhile stuck to plans to add a modest 432,000 bpd of supply in May, despite western pressure on Saudi Arabia and the UAE to use their spare capacity to boost output further.
International Energy Agency (IEA) member countries are set to meet at 1200 GMT on Friday to discuss a further emergency oil release alongside a huge release by the US., that would follow their March 1 agreement to release around 60 million barrels.
Brent crude futures slipped to $103.29 a barrel, after dropping 5.6% on Thursday. The May contract expired on Thursday at $107.91.
U.S. WTI crude futures meanwhile dipped below $100 to $98.86 a barrel after trading as high as $101.75. The contract slumped 7% on Thursday.
Both the benchmark contracts were each headed for a weekly loss of around 13%, their biggest in two years.
CURRENCIES
The closely watched spread between U.S. two-year and 10-year notes was barely above zero on Friday, after briefly inverting. An inversion in this part of the U.S. yield curve is viewed as a reliable signal that a recession may follow in one to two years.
Benchmark 10-year notes last yielded 2.398%, from 2.325% late on Thursday while the 2-year yield was a 2.3648%, from 2.284%. That part of the yield curve inverted on Tuesday for the first time since September 2019. It inverted again late in U.S. trade on Thursday.
The U.S. dollar index had risen to 98.480 points as foreign exchange investors were seeking refuge against market uncertainties, building on Thursday's 0.50% climb.
Cryptocurrency bitcoin slumped 0.93% to $45,093.74, sliding 3.78% this week after reaching $48,234.00 on Monday for the first time since the start of this year.
GOLD
Gold prices struggled for momentum on Friday as a stronger US dollar negated safe-haven demand.
Gold was flat to $1,936.50 an ounce, and on course to end the week more than 1% lower. US gold futures fell 0.7% to $1,940.70.
ECONOMIC OUTLOOK
Asian shares were mixed in Friday trade, as investors remains wary about the continuing conflict in Ukraine and its inflationary effect on prices and the Federal Reserve's response.
While optimism about a possible peace deal between Ukraine and Russia helped lift stocks earlier in the week, hopes quickly evaporated and Russia's President Vladimir Putin threatened on Thursday to halt contracts supplying Europe with a third of its gas unless they are paid in roubles.
The move prompted Germany, the most reliant on Russian gas, to accuse him of "blackmail" as it activated an emergency plan that could lead to rationing. The United States meanwhile imposed new Russia-related sanctions, and U.S. President Joe Biden launched the largest release ever from the country's emergency oil reserve
While negotiations aimed at ending the five-week war were set to resume, Ukraine remains braced for further attacks in the south and east.
Already-high U.S. inflation has intensified with surging commodity prices such as oil and metals since the war began. Commodity prices watched as Russia will ban exports of sunflower seeds from Friday until the end of August and impose an export quota on sunflower oil to avoid shortages and ease pressure on domestic prices, its Agriculture Ministry said on Thursday. U.S. farmers also reportedly planned to cut their seedings of both corn and wheat in 2022, even as domestic wheat supplies are at their lowest in 14 years and demand for both grains is rising, following Russia's invasion of Ukraine that disrupted shipments from those key suppliers, the U.S. Agriculture Department said on Thursday.
Most Asian factories saw activity slow in March, as slumping Chinese demand and rising raw material costs blamed on the Ukraine crisis added strains to firms already suffering from lingering supply chain disruptions. China's factory activity slumped at the fastest pace in two years in March, a private sector PMI showed on Friday. The Caixin/Markit manufacturing PMI for March came in at 48.1, compared against the previous month’s reading of 50.4. Factory activity also slowed in Taiwan, South Korea, and Vietnam, and contracted in Malaysia, as the region felt the pain from rising raw material prices, other PMIs released on Friday showed.
By contrast, Japan saw manufacturing activity grew at a faster pace from the prior month in March, as domestic demand got a lift from the waning impact of the pandemic.
Investors will look toward Friday's jobs report for more confirmation of labor market strength and insight into the possible path of monetary policy by the U.S. central bank.
