April 25, 2022
- Downbeat moods could be spotted during the Asian session today. Nikkei dropped 1.7%, Kospi declined 1.4% and indices from China traded up to 3% lower. Stock exchanges in Australia and New Zealand were closed for holiday.
- US and European index futures are trading lower at the beginning of a new week.
- Market moods deteriorated as Covid situation in China is not improving and media hint that Beijing could be next in line for lockdown.
- As China is the second largest economy in the world, the situation also has a big impact on commodity markets. Oil and industrial metals drop significantly today – WTI drops 2.8% and falls below $99 per barrel.
- Emmanuel Macron won a second term in French presidential elections. Macron got slightly over 58% of votes and defeated far-right candidate Le Pen (slightly less than 42% of votes).
- German Minister of Finance Lindner said that borrowing plans will increase by nearly €40 billion in 2022.
- ECB President Lagarde said that around half of current inflation comes from higher energy prices and rate hike will not change it
- According to UK Times, European Union is preparing “smart sanctions” on Russian oil and sixth sanctions package will be presented soon.
- Cryptocurrencies are taking a hit, along with other risk assets. Bitcoin drops 1.5% while Ethereum plunges 3%
- Precious metals trade lower with palladium being top laggard (-2.6%).
- USD and JPY are the best performing major currencies while AUD and NZD lag the most.
Fear that lockdowns will be imposed in Beijing are denting market sentiment at the beginning of a new week. Japanese Nikkei (JAP225) dropped 1.7% today and revisited the mid-April low near 26,450 pts. Source: xStation5