EQUITIES
Shares in Asia-Pacific were mixed while European markets are expected to open higher to end a volatile trading week as investors assess the pace of the Federal Reserve’s monetary tightening plans and news from Ukraine.
In Asia, Japan's Nikkei wobbled a little higher, rose 0.36% but remained on course for a weekly loss of nearly 3%. Hong Kong’s Hang Seng index fell 0.37%, while the Shanghai composite added 0.34%.
In South Korea, the KOSPI rose 0.16%, and in Australia, the S&P/ASX 200 rose 0.47%. In Southeast Asia, Singapore’s Straits Times index slipped 0.77%.
OIL
Oil prices drifted slightly lower on Friday and were set to drop around 3% for the week after consuming countries agreed to release 240 million barrels of oil from emergency stocks to help offset disrupted Russian supply.
Investors are also assessing the fundamentals in the oil market amid uncertainties over slowing demand in China, where cities have been under lockdown due to the latest wave of COVID-19 infections, and the loss of supplies from Russia.
Brent crude futures slipped 0.08% to $101.36 a barrel, while U.S. WTI crude futures pared 0.65% to $96.51 a barrel.
The IEA on Thursday confirmed member country contributions to the second collective action to release oil stocks in response to Russia’s invasion of Ukraine. The commitments submitted by members reached 120 million barrels to be released over a six month period, the IEA added, with major contributors include South Korea, Germany, France, Italy and the United Kingdom. Meanwhile the U.S. will release 60 million barrels of oil from storage and Japan will release 15 million barrels.
CURRENCIES
The U.S. dollar has been the primary beneficiary and the dollar index, which measures the greenback against a basket of six major currencies is up seven days in a row and extended a relentless upward move on Friday, was last at 99.867. The index is up 1.3% this week, backed by hawkish remarks from several Federal Reserve policy makers who are calling for a faster pace of interest rate increases to curb rapid inflation.
The U.S. Treasury yields also jumped along. The 10-year Treasury yield touched 2.667% in the previous session, its highest level since March 2019, and was last at 2.660%. The 2-yr/10-yr spread widened as traders sharpened their focus on the pace and scope of the Fed's plans to reduce its balance sheet. The yield curve inverted last week, signalling to some investors that a recession may be coming in a year or two.
Slightly lower oil and other commodity prices this week saw commodity currencies like the Australian and Canadian dollars, taking a breather after gaining strongly in recent weeks.
In cryptocurrency markets, bitcoin was trading slightly higher around $43,500 just off its overnight two-week low of $42,742.
GOLD
Gold traded in a tight range on Friday as the dollar climbed higher, partially offsetting safe-haven demand fuelled by the heightened Russia-Ukraine conflict.
Spot gold was flat at $1,929.00 per ounce, while the U.S. gold futures were down 0.22% at $1,933.50.
Spot silver was flat at $24.57 per ounce. Platinum was down 0.2% at $961.05 and palladium rose 1.5% to $2,267.55. Platinum and palladium metals were set for a fifth consecutive weekly loss.
ECONOMIC OUTLOOK
Shares were mixed on Friday on bargain-hunting, with most stocks were headed for a weekly loss as the prospect of aggressive global rate hikes began to rattle investors, while bonds languished, and the dollar looked set to ride higher yields to its best week in a month.
Mega-cap growth stocks have come under pressure this week after comments from Fed policymakers and minutes from the central bank's March meeting suggested a rapid removal of stimulus measures put in place during the pandemic. Meanwhile, defensive stocks like consumer staples and health care led the market comeback.
COVID-19 remains is in focus in China, with Shanghai reporting 20,398 new asymptomatic coronavirus cases and 824 new symptomatic cases on April 7. The city is under a strict lockdown in a bid to stop the spread of the virus.
