EQUITIES
Shares in Asia-Pacific were mixed in Monday trade. The Nikkei 225 in Japan fell 2% momentarily in morning trade before retracing some of those losses, last declining 0.71% in the afternoon. In mainland China, the Shanghai composite dipped 0.34% while in Hong Kong, the Hang Seng index declined 1.71%. South Korea’s KOSPI fell 0.16%.
Elsewhere, Australia’s S&P/ASX 200 gained 0.16%, while the Straits Times index in Singapore advanced 0.14%.
European markets also expected to open cautiously as the Russia-Ukraine crisis develops. Investor sentiment improved after U.S. President Joe Biden accepted “in principle” a meeting with Russian President Vladimir Putin if Moscow has not invaded Ukraine. Markets in the U.S. are closed on Monday for a holiday.
OIL
Oil prices fell on Monday, as investors eyed prospects of an agreement in the nuclear deal in Iran and as the U.S. President Joe Biden and Russia's Vladimir Putin agreed to hold a summit on the Ukraine crisis.
Oil markets have been jittery over the past month on worries a Russian invasion of its neighbour could disrupt crude supplies, but price gains have been limited by the possibility of more than 1 million barrels a day of Iranian crude returning to the market.
The Brent now traded at $93.04 per barrel, while the U.S. crude futures traded at $89.47 per barrel.
On Friday last week, the Brent futures ends at $93.54 a barrel, while the WTI crude oil prices closed to $91.07 per barrel.
CURRENCIES
Currency markets started the week nervously eying tensions in eastern Europe, with the benchmark 10-year yield was flat at 1.927%.
Meanwhile the U.S. dollar index, which tracks the greenback against a basket of its peers, was at 95.815 after seeing an earlier high of 96.151.
China held steady on a benchmark lending rate, with the one-year LPR kept unchanged at 3.7%, in line with predictions. The five-year LPR was also kept unchanged at 4.6%.
GOLD
Gold prices fell from a more than nine-month high hit earlier today, as safe-haven demand eased after the U.S. president agreed to meet his Russian counterpart over the Ukraine crisis.
Spot gold fell 0.4% to $1,890.50 per ounce, retreating from $1,908.02 — its highest since June 3 hit earlier in the session. U.S. gold futures were steady at $1,893.40.
Spot silver fell to $23.74 per ounce, platinum slipped to $1,072.00 and palladium was flat at $2,346.80.
ECONOMIC OUTLOOK
Asian share markets pared losses on Monday as a glimmer of hope emerged for a diplomatic solution to the Russian-Ukraine standoff. Heightened geopolitical risks combined with rising rampant inflationary concerns have added to the pressure on Asian markets in recent weeks.
A bleak start was brightened by news U.S. President Joe Biden and Russian President Vladimir Putin have agreed in principle to hold a summit on the Ukraine crisis. One condition for the summit was that Putin did not invade Ukraine, a turn of events that still seemed possible given Russia extended military drills in Belarus and continued to build up troops on the Ukraine border.
European Commission President Ursula von der Leyen said Russia would be cut off from international financial markets and denied access to major exports needed to modernise its economy if it invaded Ukraine.
Also troubling markets has been the prospect of an aggressive tightening by the U.S. Fed as inflation runs rampant. The Fed's favoured measure of core inflation is due out later this week and is forecast to show an annual rise of 5.1% — the fastest pace since the early 1980s. Markets also will be closely watching a string of public remarks from Fed policymakers this week for any hint that a large 50 basis point rate hike could come at the Fed's March meeting instead of the more widely expected 25 basis point increase.
