Daily Market Update Apr 12
Global equities were lower once again no obvious trigger. Declines were led by China / HK as movement restrictions in Shanghai continue to be strict. Cases are north of 20k and given China's zero covid policy, the govt reiterated it will impose the strictest lockdowns even if there is a single case.
US has called for all nonessential staff to leave the city citing 'arbitrary' virus restrictions. The likely impact of demand reduction has helped bring Crude back to its pre-invasion levels as Brent continues to test the 100 support level.
Ukraine has appealed to commodity traders like Vitol, Gunvor, Trafigura and Glencore to stop dealing in Russian crude, saying they are helping Russia fund the war. Russia's central bank chief said restrictions on access to dollars and euros would be overcome by sufficient reserves in gold and yuan.
OPEC has now publicly stated they cannot replace the 7 mn barrels per day of Russian crude were it to be hit by sanctions at some point. Natural gas bucked the trend of lower commodities to close over 5% higher on the day.
The US yield curve got steeper as yields continued to trend higher. The 10Y now crossed the 2.8% mark with the 5s10s at par now and the 2s10s widening to almost 30 bps. The 20Y yield became the first tenor to hit the 3% mark in the last decade as the real yield in the 10Y bucket pulled closer to zero.
SPX saw all sectors lower and declines were led by Energy. Key support levels gave way in Crypto as Bitcoin fell below 40k and Ethereum below 3k. US inflation numbers today are expected to hit another multi-decade high today, with a majority of analysts calling for a peak soon as base effects come into play.
Have a great day ahead
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T. Rowe Price