Asian markets are mixed, with attention focused on Ukraine discussions and the Shanghai shutdown.
The Asian markets were all over the map on Monday, but they were all hoping for progress in Russia-Ukraine peace talks this week. A partial shutdown in Shanghai added to already-strained supply lines.
Expectations that the Federal Reserve will be more aggressive in its efforts to keep inflation down keep people from feeling good. Treasury yields, which are a good predictor of future interest rates, keep going up.
With the Ukrainian conflict entering its second month, investors are hopeful that the two sides will make progress toward resolving the issue when they meet in Turkey on Monday or Tuesday.
President Volodymyr Zelensky expressed optimism that they would bring peace “immediately,” despite numerous earlier rounds failing to resolve conflicts over Kyiv’s Western allegiance and Russia’s control of the country’s eastern regions.
However, there is hope that if Moscow’s troops fight hard against a much smaller enemy, they might be willing to back down.
Zelensky earlier said that he was evaluating “seriously” a Russian demand for Ukrainian “neutrality.”
Vladimir Putin approved the attack in February because he wanted to weaken Ukraine’s military and get rid of pro-Western President Petro Poroshenko. This way, the country would be under Moscow’s control.
However, senior general Sergei Rudskoi said that the “primary goal” should be to take Donbas, which is already part of Russia’s territory in the east.
While there is a glimmer of hope for a ceasefire, people are still worried about China’s economy.
Shanghai, the country’s biggest city and financial center, would shut down in stages to fight an Omicron epidemic. The east would shut down Monday through Friday, and the west would follow on April 1.
The announcement impacted oil prices as traders assessed the possibility of a decline in demand in the world’s top crude consumer. There are still a lot of fears about supply problems because of the conflict in eastern Europe. Both major contracts fell more than 2% on Monday, but they still remain high because of that.
Still, equity markets were split, with Hong Kong rising more than 1% after Friday’s massive losses, while Sydney, Seoul, Singapore, and Jakarta all gained.
Tokyo, Shanghai, Taipei, Manila, and Wellington all saw declines.
Fears about the Federal Reserve raising interest rates are still very real, even though the stock market has been strong in the face of more uncertainty.
Wall Street banks have called for additional half-point increases before the end of the year, with Citi anticipating a 3.75 percent rate in January and Bank of America anticipating a 3.25 percent rate in January.
It comes as inflation in the United States has hit 40-year highs, and other central banks have been forced to move quickly and harshly on interest rates as prices rise.
