Inflation flying, again
The Personal Consumption Expenditures (PCE) price index, excluding food and energy prices, increased 5.4% year on year. This is the biggest jump in inflation since April 1983.
The Fed has started to show its shift towards more hawkish policy, with other economical indicators, such as jobs openings and the unemployment rate hitting their desired targets. This added hawkishness has added some volatility to the markets, as participants start pricing in a 50 basis point hike in the next meeting.
One may wonder if the Russia-Ukraine crisis has caused this spike in inflation, and if it were to be a short-term spike, or something that can last for long periods of time. The Fed is threading carefully, as a wrong move can lead the country into an unnecessary recession.
Relief for the oil market?
With tensions in Europe staying heightened, oil prices have stayed elevated for long periods of time, staying above $100 per barrel for most of the past month.
With this, the US are planning to take more drastic measures, dipping into their Strategic Petroleum Reserve, and releasing 1 million barrels a day for 6 months.
Furthermore, the Organization of the Petroleum Exporting Countries (OPEC), have agreed to produce an additional 432,000 barrels per day starting from May 1.
The run from China?
China has been an economical powerhouse that is arguably the biggest competitor to the US and its dominance. In recent times, with the US going through stressful times, these arguments have gained more and more footing.
Despite this, it seems that more and more affluent Chinese nationals are ditching their homeland in a bid to protect their wealth, with Singapore being one of the more attractive places they are looking at.
With China consistently seeming to go for their common prosperity route, clamping down on private education and tech, this may drive fear into the rich Chinese, making the flight from China to continue on.
Zero covid policy, a thing of the past?
At the start of the pandemic, most countries were in lockdowns in a bid to completely halt the spread of COVID-19. However, as time passed, the world population started to get more used to COVID-19 being an endemic, and to move on with their lives.
However, China is taking the route everyone else had abandoned ages ago, the zero COVID route. The whole of Shanghai is under some form of lockdown that started on the 28th of March.
Shanghai is China's most international city, boasting significant finance, trade, and having the world's largest port, measured by cargo throughput.
Operation Ukraine. Failed?
The Russian army began its invasion of Ukraine at the end of February, and its been over 1 month and the Russian army has still not laid foot in Kyiv, the Capital of Ukraine.
Russia as a country is about 28 times larger than Ukraine, and yet they are still suffering lackluster results in the region. Ukraine has even struck back, forcing troops away from the capital as well as the southern region of Kerson, the only significant city that Russia has occupied.
Russia has also blamed Ukraine for a helicopter attack on a fuel depot, which resulted in zero casualties. Ukraine has denied all allegations, putting more speculation on Russia and their tactics to win this war.
Upcoming events
Monday, 04 April
Singapore - Manufacturing PMI (March)
Euro Zone - PPI (February)
Euro Zone - Eurogroup Meetings
Tuesday, 05 April
Singapore - Retail Sales (February)
United Kingdom - Services / Composite PMI (March)
United States - Trade Balance (February)
Wednesday, 06 April
United Kingdom - Construction PMI (March)
Untied States - API Weekly Crude Oil Stock
United States - Crude Oil Inventories
Thursday, 07 April
Singapore - Foreign Reserves USD (March)
United Kingdom - Halifax House Price Index (March)
Euro Zone - ECB Account of Monetary Policy Meeting
United States - FOMC Meeting Minutes
United States - Initial Jobless Claims
Friday, 08 April
China - FX Reserves USD (March)