Asian stock markets slumped on Monday following the Covid-19 travel blockade in Shanghai that affected economic activity and the supply chain, further adding to inflationary pressures.
The increase in Covid-19 cases in China has caused many firms to suspend operations and order workers to work from home in 2-stage restrictions yesterday 9 days.
Moreover, risky sentiment emerged behind hopes in the Russia-Ukraine talks to be held in Turkey this week to discuss the acceptance of the neutral status proposed by President Volodymyr Zelenskiy.
The MSCI Asia-Pacific broad index of stocks outside Japan was down 0.1% while Japan’s Nikkei was down 0.4%.
The S&P 500 futures were down 0.2% and the Nasdaq Composite futures were down 0.3%.
According to analysts at Citi, the Wall Street market is proving very resilient to the effects of the Federal Reserve’s (Fed) hawkish actions.
He added that it expects the Fed to continue raising until 2023 to reach its target of 2.5% to 2.75%, after it forecast 275 basis points in this year's tightening policy including half -point increases in May, June, July and September.
Meanwhile, payroll data to be released on Friday expects a strong increase of 475,000 with the unemployment rate hitting a low of 3.7%.
In addition, also of interest is the survey on global manufacturing and inflation readings of the United States (US) and the European Union (EU).
Meanwhile, 10 -year treasury yields jumped 33 basis points last week and are expected to rise 66 basis points this month by 2.48%.
Summary of the currency market, the Yen posted losses as policymakers in Japan kept yields around zero and rising commodity prices caused import bills to soar.
The dollar jumped 6.2% against the Yen to hit 122.18 while the Euro rose 4% against the Yen at 134.27.
The decline of the Yen has pushed the dollar index higher at 98,848, a monthly increase of 2.2%.
For commodities, gold prices remained at $ 1,955 an ounce, up 2.5% on a monthly basis.
