We had comments from a couple of Federal Reserve officials over the weekend, Williams and Daly. Williams indicated balance sheet reduction could begin next month (the next Federal Open Market Committee meeting is May 3 and 4) while Daly backed the prospect of a 50bp rate hike at the May meeting (and likely more to come).
It was a holiday in China today (and is again tomorrow) but there was a steady drip-feed of news out of the country as coronavirus outbreaks worsened and the lockdown in Shanghai intensified. Chinese officials once again reiterated that the ‘zero’ policy remains in place with no plans for an exit. Medical personnel are flooding into Shanghai to assist in efforts to combat the spread, including 2000+ from the People’s Liberation Army.
Also from China, over the weekend we had an announcement from the China Securities Regulatory Commission (CSRC) removing a legal hurdle to greater cooperation with US authorities on auditing Chinese listed firms in the US. More in the bullets above. This should be a positive input for Chinese equities (which reopen for trade on Wednesday after the holidays) and indeed stocks in Hong Kong gained on the session today (ps. HK markets are closed for a holiday Tuesday. And also ps., HK CEO Carrie Lam announced today she would not be seeking a 2nd term when her current term expires).
Across FX, moves were fairly limited. USD/JPY began by dropping 40 or so points but has since recovered all of this. EUR/USD is up just a few tics on the session. The EU is mulling tighter sanctions on Russia re its war on, and war crimes in, Ukraine. AUD, NZD, and CAD all gained some points against the dollar. Oil and gold lost some ground. Oil has managed to trace much of its small slide.
Bitcoin popped above US$47K on Monday morning time in Asia but quickly turned around to drop back under $46K. Its above $46k as I post.
Read More: ForexLive Asia FX news wrap: BTC volatility