Rising global inflation forces central banks to revise the monetary policy in a tighter direction

Inflation data led to a decline in US yields on Tuesday, but they recovered slightly late in the day and early in trading on Wednesday.

The US earning season for the first quarter of 2022 has begun. JPMorgan, BlackRock, Infosys, Fastenal, First Republic Bank, Tesco, and Delta Airlines will report today.

Russian President Vladimir Putin said that the peace talks “once again deadlocked for us.” Hopes for peace are fading as Russia builds up its army in Southeast Ukraine. US President Joe Biden has said for the first time that Moscow’s invasion of Ukraine is tantamount to genocide, and the United States is reportedly set to announce an additional $750 million in military aid, a sign that the war will continue. Today, the Pentagon will host leaders of eight major US weapons manufacturers to discuss the industry’s ability to meet Ukraine’s weapons needs if the war with Russia continues for years.

Oil prices rose above $100 a barrel on Tuesday as Shanghai’s efforts to ease some quarantine measures over Covid-19 eased concerns about the impact on global demand. The rise in oil prices came ahead of new weekly US oil reserves data, which are expected to show a second-week increase in inventories.

Stock indices of the Asia-Pacific region showed mixed movements yesterday. Japan’s Nikkei 225 (JP225) lost 1.81%, Australia’s S&P/ASX 200 (AU200) decreased by 0.42%, while Hong Kong’s Hang Seng (HK50) gained 0.52%.

The central bank of New Zealand has announced the steepest interest rate hike in two decades to curb inflation. RBNZ raised the rate immediately by 0.5%. Chinese exports continued to grow in the first quarter of 2022, but the war in Ukraine and the latest COVID-19 outbreak in the country may slow exports in the next quarter. Over the past two years, China’s strong trade performance could slow in 2022 as other countries loosened restrictive measures related to COVID-19. The surge in energy prices and supply disruptions caused by the war in Ukraine continues to put pressure on exporters. On Wednesday, Bank of Japan Governor Haruhiko Kuroda said that the central bank would continue its ultra-soft monetary policy to support the economy under pressure from rising import costs.