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Turns cautious ahead of Western monetary policy week, oil defends $70.00


  • Asian indices are facing immense pressure following the footprints of the S&P500.
  • Global volatility is escalating on expectations of fresh rate hikes by Western central banks.
  • Oil prices have rebounded on the fresh supply crisis in the United States.

Markets in the Asian domain have turned risk averse as investors are experiencing sheer anxiety ahead of the interest rate decision from various central banks. Indices are following the footprints of the S&P500 and are likely to remain on tenterhooks as the fresh rate hike cycle will escalate recession fears. The US Dollar index (DXY) is aiming to overstep the day’s high around 105.20 amid an upbeat market mood. Meanwhile, the US Treasury yields have surrendered their gains and have shifted into a negative trajectory.

At the press time, Japan’s Nikkei225 eased 0.20%, ChinaA50 plunged 1.23%, Hang Seng plummeted 1.93% while Nifty50 added 0.07%.

This week, the Federal Reserve (Fed), European Central Bank (ECB), Bank of England (BOE), and the Swiss National Bank (SNB) will announce their last monetary policies of CY2022.  All western central banks are expected to hike their interest rates, which will accelerate the risk of recession in the global economy. Also, their guidance on interest rates will be keenly watched.

Meanwhile, Chinese equities are facing immense pressure as Covid restrictions easing-inspired optimism is fading away. No doubt, the institutional investors are hiking their guidance for economic projections but the impact of recent carnage will stay for a while.

On the oil front, oil prices have rebounded after dropping to near the critical support of $70.00. The oil price has managed to defend the critical support and has resurfaced firmly as a key pipeline supplying the United States remained shut while Russian President Vladimir Putin threatened to cut production in retaliation for a Western price cap on its exports, reported Reuters.

 



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