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US Dollar Weaker, Other Currencies, Oil, Gold Rise

The US Dollar and US Treasuries retreated during the Asian session, today, Monday. Asian stocks traded mixed and were under pressure as China’s Covid lockdowns spark worries about the growth and outlook of one of the world’s biggest economies.

Equities in Japan experienced a slight rise, Chinese tech stocks slid as Beijing reported a fresh Covid-19 outbreak. Nasdaq 100 & S&P 500 futures advanced after the S&P 500 slid for seven consecutive weeks – a sharp fall last recorded in 2001.

Investors’ Watch

Investors are focusing on fears over an economic slowdown and the prospect of higher interest rates and tighter monetary policy in the US. At the same time, the Russian invasion in Ukraine has commodity prices on a rally as Covid lockdowns in China keep disrupting supply chains. These forces could be key factors driving market volatility further.

Beijing’s record number of Covid cases fueled concerns about a new lockdown as China is adhering to a strict zero Covid cases policy. China’s lockdowns have held economic growth back and caused banks to lower a key interest rate for long-term loans while the one-year loan prime rate has remained untouched.

Fed’s Next Moves

As investors are looking for indications as to what the Fed’s next moves will be, the minutes of the latest Fed rate meeting will shed some light into the US central bank’s monetary tightening plan. In the meantime, St. Louis Fed President James Bullard said that the Fed should hike interest rates to 3.5% to curb inflation faster.

Forex Market Moves

The US dollar fell today, Monday, after its first weekly loss in about 2 months, as the selling pressure remained high.

In other markets, the Australian dollar advanced after a clear win for the weekend’s election. The New Zealand Dollar, the euro, yen, and safe-haven Swiss franc also gained. Last week, the yuan recorded its best week in more than 2 years. The British pound also advanced last week boosted by stronger-than-expected retail data and a re-evaluation of whether global central banks are falling behind compared to the Federal Reserve.

Gold Up & Other Metals’ Moves

Gold was trading higher on Monday morning in Asia, climbing to a more than one-week high. The precious metal was supported by the weakening US dollar. At the same time silver, palladium and platinum were also on the rise.

Price of Oil Higher

Oil prices advanced on Monday. The “black gold’s” rise was aided by U.S. fuel demand, tight supply, and a slightly weaker US dollar as China’s financial hub Shanghai is planning to reopen following a two-month lockdown that sparked worries over a growth slowdown.

What to Watch out for this Week:

Monday

Atlanta Fed President’s speech
Kansas City Fed President’s speech
ECB Governing Council members & BOE Governor’s talks on inflation

Tuesday

Eurozone S&P Global PMIs
US New Home Sales
S&P Global PMIs

Wednesday

Reserve Bank of New Zealand Rate Decision
FOMC Minutes
Financial Stability Review by ECB

Thursday

Bank of Korea Rate Decision
US GDP
US Initial Jobless Claims

Friday

US Core PCE Price Index
US Personal Income and Spending
US Wholesale Inventories
University Of Michigan Consumer Sentiment