Asian stocks rise with the US dollar and euro stabilizes and oil prices rise

Asian stocks rose on Monday after a much-needed rebound on Wall Street
but concern prevailed before the almost certain rate hikes in Europe and another round of corporate earnings reports
while the greenback stabilized after reaching two-decade highs
and oil prices rose as the number of coronavirus infections rose in China.

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Asian stocks rise on interest rate hike concern

The dollar stabilizes after reaching a two-decade high

Oil rises as coronavirus infections surge in China renewing demand concern

Asian stocks rise on interest rate hike concern

This week is expected to be risky for Europe waiting to see if Russia resumes gas flow through the Nord Stream 1 pipeline on July 21.

The ECB will continue to suffer from uncertainty holding a policy meeting as it is likely to start a tightening cycle with a 25 basis point rise.

Markets are also clinging to details of an anti-retail tool aimed at relieving pressure on borrowing costs for the most indebted Union members.

Investors found some relief in Friday’s rally on Wall Street and MSCI’s broadest index of Asia-Pacific shares outside Japan rose by 0.7 percent
after falling by 3.5 percent last week.

Japan’s Nikkei index closed for a holiday, but futures traded at 27,040 compared to a cash close of 26,788
while South Korean stocks rose by 1.4 percent.

Chinese premium companies added 0.4 percent
despite Shanghai announcing more coronavirus tests across the region.

S&P 500 futures rose by 0.2 percent, while Nasdaq futures rose by 0.4 percent
EUROSTOXX 50 futures rose by 0.1 percent and FTSE futures stabilized.

Investors are also encouraged that the Federal Reserve is likely to raise “only” 75 basis points next week
in part due to easing consumer concerns about inflation.

In the analysts’ view, this decline in inflation expectations as one of the reasons why we expect
that the FOMC will not accelerate the rally in the near term and will increase 75 basis points at the FOMC meeting in July.

It is a less severe week for US data, although the first round of rapid surveys
on global manufacturing will provide a timely reading on how industries fare this month.

The Bank of Japan is holding its policy meeting with concern that the sharp decline in the yen increases
the cost of imported goods and widens the country’s trade deficit.

However, markets assume that the central bank will adhere to its very easy policies
putting it away from major currencies that do not raise interest rates.

The dollar stabilizes after reaching a two-decade high

The US dollar index stood at 107.86, marginally below last week’s two-decade high of 109.290
although few appear willing to call for the peak of dollar gains.

The euro was slightly more stable at $1.0107, bouncing back from a two-decade low of $0.9952 last week.

While the dollar was more resilient at 138.15 yen, having risen by 1.8 percent last week to a 24-year high of 139.38
against a basket of currencies, the greenback settled at 107.730.

The Federal Reserve meets later in July and is expected to raise the benchmark US interest rate by 75 basis points,
although this is considered more conservative than last week’s 100 basis point rise, still represents a sharp increase.

While experts predict that the Russian-European natural gas pipeline currently closed for maintenance is set to return on Thursday
however, if the gas flow does not resume, the euro could fall against the greenback by at least 2 percent.

Higher interest rates and a steady dollar were a major impediment to unprofitable gold that remained stuck at $1713 an ounce
having lost 2 percent of its value over the past week.

Oil rises as coronavirus infections surge in China renewing demand concern

Oil rose on Monday morning in Asia, while investors worried about China’s coronavirus cases that could lead to increased fuel demand.

Brent crude futures rose by 0.64 percent to $101.81 by 4:23 a.m. GMT
and West Texas Intermediate crude futures jumped by 0.39 percent to $94.94.

China, the world’s second-largest oil consumer, recorded 691 infections of COVID-19 on Saturday, up from 547 a day earlier.

Oil opens the week more flexibly as the market absorbs the impact of demand for rising new COVID infections in China
and while the market cautiously awaits the threat of a huge event if Nord Stream 1 gas flow from Russia resumes to Europe later this week.

Nord Stream 1, the largest pipeline transporting Russian natural gas to Germany
began annual maintenance work on July 11 due to the past 10 days.

Markets are concerned about the possible extension of the lockdown due to the war in Ukraine.
The loss of gas will affect Germany, the world’s fourth-largest economy.

As expected, US President Joe Biden failed to get OPEC’s top producers to make any pledge to increase oil supplies.

Saudi Arabia’s foreign minister said that the US-Arab summit on Saturday did not discuss oil
and that OPEC + will continue to assess market conditions and do what is necessary.

Asian stocks rise with the US dollar and euro stabilizes

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