EURUSD is back below the 1.0800 figure, holding just above two-year lows seen last week around 1.0757
Asian shares retreated in thin holiday trade on Monday amid persistent worries about inflation and geopolitics. The Shanghai Composite index dropped 0.49% despite the data showed that China’s GDP expanded by 4.8% in the first quarter from a year earlier, exceeding expectations for a 4.4% gain. On the negative side, however, retail sales fell 3.5% in March, the most on an annual basis since April 2020. Adding to a bearish tone, Shanghai reported first Covid deaths since the start of its latest lockdowns. Meanwhile, Japan’s Nikkei 225 dropped 1.08% and South Korea’s Kospi declined 0.11%. MSCI’s broadest index of Asia-Pacific shares outside Japan gave up 0.72%.
While European stocks are closed on Easter Monday, US stock index futures are pointing lower in early pre-market trade following a three-day holiday weekend while Treasury yields keep climbing north. The benchmark 10-year Treasury note rose to a high of 2.884% as investors continue to price in more aggressive interest-rate rises by the Federal Reserve. In the coming days, fresh hawkish comments from the central bank’s officials could add to a downbeat tone in the stock market while also pressuring bonds.
Meanwhile, the USD index is back at two-year highs around 100.76, targeting the 101.00 figure due to a combination of safe-haven demand due to risk aversion and solid economic data out of the United States, fueling hawkish expectations for Fed’s aggressive tightening plan. Against this backdrop, EURUSD is back below the 1.0800 figure, holding just above two-year lows seen last week around 1.0757. Should the common currency derail this mark, the 1.0725 zone would come into the market focus.
In other markets, Brent crude briefly rallied above $113 a barrel earlier on Monday to settle around $111 in recent trading. Oil prices rose amid worries about tighter supply after the closure of production at a major oil field in Libya. Also, the EU is working on mechanisms so that oil could be included in the next sanctions against Russia.
