Oil prices slide heavily due to Shanghai lockdown

Oil prices slide heavily due to Shanghai lockdown

On Monday, Asian stocks fell and oil prices fell as a coronavirus lockdown in Shanghai slowed economic activity, while the yen continued its stomach-churning drop as the Bank of Japan resisted higher yields.

In a two-stage shutdown lasting nine days, China’s financial capital of 26 million people ordered all businesses to halt production or have employees work remotely.

Brent declined $3.39 to $117.26 as a result of the spread of limitations in the world’s largest oil importer, while U.S. crude fell $3.41.

The prospect of success in Russian-Ukrainian peace talks, which will take place in Turkey, boosted risk sentiment.

The stock market was relatively quiet, with MSCI’s broadest index of Asia-Pacific shares outside Japan remaining unchanged. Although the index is down 2.1 percent for the month, it is still considerably above recent lows.

Blue chips in China fell by 0.8 percent. The Nikkei 225 index of Japan fell 0.4 percent but is still about 6% higher for the month as the yen fell, boosting exporter earnings.

Futures on the S&P 500 index fell 0.3 percent, while Nasdaq futures down 0.4 percent. The EUROSTOXX 50 futures gained 0.3 percent, while the FTSE futures gained 0.2 percent.

So far, Wall Street has been astonishingly robust in the face of a Federal Reserve that is drastically more hawkish.

For the remaining six policy meetings this year, markets are pricing in eight rises, bringing the funds rate to 2.50-2.75 percent.

For some, even that viewpoint isn’t aggressive enough. The statistics from the United States will assist to shape predictions about whether the tightening of financial conditions is beginning to spread to the rest of the economy.

10-year Treasury yields jumped 33 basis points last week and are now at 2.53 percent, up 71 basis points on the month. This has pushed up mortgage rates in the United States.

The Japanese yen has been the biggest loser in currency markets, as policymakers hold yields near zero and the country’s import bill balloons due to sky-high commodities costs.

More at: FXreviewtrading.com

Get a Callback

A trusted broker will contact you today.

Trading View

Top Brokers