Asia equities are trading negative following the weak lead from Wall Street, where S&P 500 and Dow Jones posted their worst performance year to date, and Nasdaq closed in a bear market amid geopolitical and oil supply/embargo crises.
Traders will continue to monitor the Oil sector as new highs in reaction to weekend reports the US, EU, UK, and Japan were all mulling the ban of Russian oil. However, Germany/EU pushed back on those claims as the EU favours reduced “dependency” efforts than a blanket ban.
Participants are waiting for developments on the Russia/Ukraine front, with the fourth round of talks on the radar. China’s President Xi is set to speak with European leaders to discuss the situation later. Aside from geopolitics and choppy commodity price action, US CPI Thursday is the data highlight for the week, but it might be framed now as the ground to which the impending Russia supply shock will add to, rather than as a potential sign of easing inflation pressures. The ECB will be in focus Thursday, as it faces a tough battle of economic growth vs inflation from Ukraine/Russia, which is expected to see them delay plans to withdraw support formally. Separately, with Europe looking at heavily decreasing dependency on Russian gas, natural gas prices have poured another 17% yesterday, leaving prices up a huge 216% year to date.
