War in Ukraine
The Ukraine war continue to be the focal point on global markets focus. Russia seems to have intensified the attack on Ukraine this past weekend, with bombs falling near the Polish border. The United States claim that Russia has asked China for military assistance which could be a potential catalyst to escalate the war, but at the same time there are some hopes of diplomatic progress ahead of fresh talks.
FOMC Meeting and potential Interest rate hike
The Federal Open Market Committee (FOMC) meets which will be held on Tuesday and Wednesday will be important meetings. The situation in Ukraine together with the sanctions imposed on Russia and Russian oligarch might be influential to a potential aggressive action from the Fed and other central banks as policymakers look to address high inflation, while not negatively affecting growth.
China sees a surge in Covid-19 cases
China, the world’s largest crude oil importer and second largest consumer after the United States, is seeing a surge in COVID-19 cases, as the highly transmissible Omicron variant spreads to more cities, triggering outbreaks from Shanghai to Shenzhen. Shenzhen has entered into a lockdown to try curb the infection rate, if the virus continues to spread and further restricts are made throughout China, we could potentially see demand for crude oil ease which in turn could affect the price.