Zelenskyy warned that if peace talks with Russia fail, it would mean the start of a third global war
Asian stocks were mostly lower on Monday while holding relatively steady amid the ongoing conflict in Ukraine. Russia issued an ultimatum for the surrender of the Ukrainian city of Mariupol, but Ukraine angrily rejected the offer. Adding to investor worries, US President Biden warned China of consequences if it supported Russia’s invasion of Ukraine. Hong Kong’s Hang Seng fell 0.89%, Australia’s S&P/ASX 200 shed 0.22%, and South Korean Kospi gave up 0.77%. Bucking the trend, China’s Shanghai Composite was up 0.08% after the People’s Bank of China kept its interest rates unchanged, as had been expected. Japanese markets are closed for a holiday.
In Europe, equities have slipped at the open, with the pan-European Stoxx 600 losing 0.1% in early trade. Investors stay cautious as Ukraine’s President Volodymyr Zelenskyy warned that if peace talks with Russia fail, it would mean the start of a third global war. Adding to worries, Europe faces a rise in Covid-19 cases in the form of a subvariant of omicron. On the data front, German producer prices rose 25.9% in the year to February amid high energy prices. US stock futures were lower in early morning trading on Monday, suggesting risk-off tone could prevail later in the day.
Meanwhile, the dollar index holds steady above the 98.00 figure while struggling to extend the bounce from local lows in thin liquidity conditions. EURUSD struggles for direction around the descending 20-DMA, challenging the 1.1150 zone. Should risk sentiment continue to deteriorate further during the session, the euro may retarget the 1.1000 figure that capped the selling pressure late last week. Earlier, the common currency ignored hawkish comments from ECB policymaker Holzmann who called for a rate hike.