The dollar opened at an average of 3,801.31, reflecting an uptick of 15.65 versus today’s Representative Market Rate (TRM) of 3,785.66 for this session. Market desks noted the opening price on Set-FX at 3,749, with a high of 3,750 and a low of 3,732.50. Throughout the session, trading activity totaled USD 47.5 million across 137 transactions, signaling cautious positioning by traders as they digest the latest inflation signals and policy expectations.
Equities gained while sovereign bonds steadied as investors weighed the inflation risk against the prospect of tighter monetary policy and ongoing growth momentum. Global sentiment showed resilience in U.S. equity futures, helped by a firmer Stoxx 600 in Europe, even as many Asian markets retreated and Chinese stocks faced pressure amid renewed concerns about disruptions to business operations from a virus outbreak.
Bond markets found footing after an earlier slide, during which five-year Treasury yields briefly exceeded the yield on 30-year maturities. In Japan, the 10-year rate edged higher despite the central bank’s announcement of two unlimited purchase operations intended to keep yields within the approved corridor, illustrating the tug-of-war between policy measures and market expectations.
In the energy complex, shares of leading U.S. oil and gas players softened in premarket trade as crude prices retreated on questions about demand in China, the world’s largest importer of crude. Meanwhile, assets tied to crypto markets rose as Bitcoin moved into positive territory for 2022, while gold prices eased to reflect shifting risk sentiment.
A growing cohort of money managers believes that stock indices have largely priced in the near-term bearish tilt in the bond market, even as strategists from Goldman Sachs and JPMorgan Chase & Co. counsel investors that the U.S. Treasury yield curve has not yet signaled a fundamental reversal risk. The conversation remains nuanced, with many analysts noting that the market’s current strength could be a tactical rally rather than a durable trend.
Geopolitical and supply considerations persist as Ukraine-related disruptions continue to affect the flow of key commodities. Inflation risk remains elevated, contributing to speculation about a more aggressive Fed tightening path. China’s mobility measures could add to the cost pressures if restrictions hamper production and logistics in major hubs.
Schroders Australia’s fixed-income vice president Kellie Wood told Bloomberg that the current backdrop resembles a bear-market rally, given the potential for abrupt shifts as traders weigh the timing and scale of policy moves. In the oil market, price declines intensified on concerns about Chinese demand, with U.S. West Texas Intermediate falling 6.25% to 106.80 USD per barrel and Europe’s Brent sliding 5.72% to 110.72 USD per barrel. Shanghai began a two-stage quarantine affecting 26 million residents in an effort to curb a fresh wave of Covid-19 infections, a move that analysts fear could prompt repeated business disruptions in China’s major centers. Carsten Fritsch of Commerzbank remarked that China’s strict zero-COVID approach continues to loom over global demand prospects, while SEB’s Bjarne Schieldrop warned of a potential shortfall in Chinese oil demand by about 800,000 barrels per day in April compared with normal levels. These dynamics reinforce a cautious outlook for commodities and inflation trajectories ahead.
Geopolitical discussions progressed as Ukrainian and Russian negotiating teams planned continued in-person talks this week, with President Joe Biden signaling that the United States does not seek regime change in Moscow despite rhetoric in earlier comments. Markets have paused at times, with global stock indices recovering from earlier lows yet facing ongoing questions about the durability of the rebound amid ongoing conflict and economic uncertainty.
Pepperstone Financial Pty research head Chris Weston noted in a market note that the current environment may be characterized as a bear-market rally, with the potential for big, suspicious moves during the coming trimester. Oil demand expectations from China, the world’s largest crude importer, are now seen as lower than typical by as much as 800,000 barrels per day in April, according to SEB’s chief commodities analyst, a signal that demand normalization remains uncertain even as supply dynamics shift.
In headlines, Shanghai initiated a two-stage lockdown affecting millions as authorities endeavor to contain a new wave of infections. Analysts warn that China’s stringent zero-COVID approach could keep production and logistics at risk for periodic interruptions, amplifying a global inflation narrative and affecting energy and materials markets.
Note: The reporting reflects ongoing market assessment across currencies, equities, fixed income, and commodities, with commentary attributed to market observers and institutions where noted in context.
La Repubblica provided background context for the broader European market reaction to these developments.