CRUDE OIL PRICE RETREATS DUE TO SHANGHAI COVID CASES

US stock futures were little changed as investors focused on activities in the bond market. Bond yields have been in an uptrend recently as the market prices in a more hawkish Federal Reserve. The yield of the 10-year rose to 2.50% while the 2-year retreated to 2.3%. At the time, the yield curve inverted for the first time since 2006. This inversion happens when shorter-term bonds have a better yield than longer ones and is usually a predictor of a recession. Analysts cite the recent hawkish statements by the Federal Reserve. Several Fed officials reiterated their earlier statements that they will be more aggressive this year in a bid to tackle inversion.

European stocks rose again ahead of the upcoming talks between Russia and Ukraine. Kremlin confirmed that these talks will happen in Turkey starting from Tuesday. Analysts are optimistic that these talks could lead to some progress. This is after Russia announced that it will seek to narrow its focus to the eastern side of Ukraine after its military found strong opposition from Ukrainians. And in a statement, the Ukrainian president said that he will be a bit flexible when it comes to the country’s neutrality. A key issue will be the two republics that Russia recognized before its attack.

The price of crude oil retreated slightly on Monday as concerns about the new wave of infections in China. Officials said that they will mandate mass testing and more lockdown in Shanghai in a bid to slow the spread. Tunnels and bridges to the financial district of Pudong were shut down while major companies like Tesla announced that they will close their plants. Other firms set up isolated bubbles meaning that workers cannot leave the premises. Highways out of Shanghai were also closed. Hong Kong has also recorded a strong uptake in the number of cases.

AUDUSD

The AUDUSD pair was little changed even after the latest announcements on China’s infections. It is trading at 0.7521, which is a few points below its monthly high of 0.7540. On the four-hour chart, it has moved above the 25-day moving average and the dots of the Parabolic SAR indicator. The pair has also risen above the important support level at 0.7443. Therefore, the pair will likely keep rising as bulls target the next key resistance at 0.7600.

EURUSD

The EURUSD pair erased some of the earlier losses as investors watched the American yield curve inversion. It is trading at 1.0987, which is a few points above this week’s low of 1.0942. On the hourly chart, the pair moved above the key support level at 1.0960, which was the lowest level on March 23rd. The Relative Strength Index has also tilted upwards. Therefore, the pair will likely remain in this range during the American session.

XBRUSD

The XBRUSD pair declined slightly on Monday as concerns about China’s Covid-19 cases rose. The pair dropped to a low of 112.14, which is lower than last week’s high of 120. It moved slightly below the 25-day moving average while the Stochastic oscillator and the Commodity Channel Oscillator pointed downwards. Therefore, the pair will likely keep falling in the coming days.