Markets always vigilant on what is happening in China: the Evergrande affair is not resolved and still requires caution in trading. Meanwhile, oil leaps to new highs.
Markets Today : Asian equities show a cautious start as a jump in oil prices to three-year highs could ignite inflation fears and exacerbate the recent hawkish turn of some major central banks.
The oil has passed the peak in July, while the natural gas shortage in Europe has increased costs across the continent.
Meanwhile, investors are still looking to China and the developments of the real estate giant Evergrande , with no official way out.
What happens in the markets today ?
Markets: Asia always pressured by the unknowns in China
Asian markets are recovering, but with caution. At around 8.10 am today, the Nikkei is just below par and the Shenzhen and Shanghai indices are trading at + 0.34% and -0.69% respectively.
Hong Kong dates back after the turmoil of recent days and gains 0.57%.
The fate of the China Evergrande Group remained a great unknown after the real estate giant missed a payment on offshore bonds, with an additional payment due this week.
The Chinese real estate regulator has stepped up oversight of the troubled developer’s bank accounts to ensure funds are used to complete housing projects and not diverted to pay off creditors. Meanwhile, Evergrande’s electric car unit will not proceed with a proposed issue of yuan-denominated shares.
Steve Brice, chief investment officer of Standard Chartered Wealth Management recalled:
“Clearly, what is happening in the Chinese economy is getting a lot more attention globally. We will undoubtedly see a slowdown in the economy in China as we move into the next year. The question now is to what extent this will happen and the knock-on implications for global growth. “
The energy crisis that is spreading throughout the world is also forcing some industries in the Dragon to close due to too high electricity prices and the very shortage of energy.
Oil in rally, focus also on the US and Germany
The markets are marked by the leap of oil, with the Brent price exceeding 78 dollars a barrel and WTI futures traveling around 75.
Eyes will also be on the fiscal policy the United States with the House of Representatives will vote this week on a bill for infrastructure from 1Trn dollars.
Meanwhile, the euro is stable at $ 1.1719 as investors ponder the implications of a German government led by Social Democrats, leading the vote count in Germany.