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Monday, March 28, 2022

Global stocks dip as investors assess fresh Russia-Ukraine peace talks, while oil falls as Shanghai goes into lockdown

  • The US Treasury's 10-year yield on Monday rose by more than 2.5%, the highest level since May 2019.
  • Oil prices fell by more than 3% after China said it would close half of Shanghai for mass testing.

Global stocks started the week earlier as a sharp rise in US Treasury yields indicated that investors were likely to look at the recession.



As the war in Ukraine enters its second month, investors are looking at what is happening, as the White House responded to President Joe Biden's comments that his Russian counterpart Vladimir Putin "could not continue to rule." Negotiations between the two sides are expected to meet in Turkey earlier this week for a new round of peace talks.


At the time, oil prices plummeted after China began a two-part closure of Shanghai to contain the COVID-19 distribution.


The future of the US traded sharply, with those at Dow Jones and the S&P 500 wide starting at 6:20 a.m. ET. Nasdaq futures lost 0.2%, suggesting a slower start of trading later in the day.




A series of key economic data reports are due this week, with a focus on Personal Consumption Expenditures on Wednesday, and a US jobs report for March on Friday. The PCE is the Federal Reserve's main inflation gauge, and higher education could give it a reason to act violently.


Markets have increased the probability of a 50-point growth rate in May to 77%, analysts say, with expected supply levels now close to 3%.


The US Treasury's 10-year yield increased by 6 points a day, and rose to 2.5567%, its highest level since May 2019. It could continue to rise to 2.7% if markets begin to prize at 2023 inflation.

The bond route suggests that low-income investors expect a recession as the Fed begins to raise prices.


Oil prices have plummeted due to concerns over a temporary need for China's closure of territories, which has halted the rise of Friday's insurgency in Saudi Arabia. China, the world's largest exporter of pollutants, has banned movement in Shanghai for mass testing due to an outbreak of corona virus cases.


OPEC and its partners will meet on Thursday, and the UAE energy minister said on Monday the country would work with members to ensure a stable energy market.


Brent crude futures fell 3.7% to $ 112.99 a barrel, while West Texas Intermediate lost 4.1% to $ 109.16 a barrel.


In Europe, London's FTSE 100 shares rose 0.4%. The pan-European Euro Stoxx 600 gained 0.7%, while the Frankfurt DAX was up 1.6%.


As long as world yields continue to rise and Bank of Japan promises unlimited support for its bond market, pressure on the yen continues. The yen dropped 1% down six years, and the dollar rose to 123.1 yen, the strongest since December 2015.


In Asia Minor, the Shanghai Composite was relatively flat. Nikkei from Tokyo fell 0.7%, while Hang Seng from Hong Kong added 1.3%.