Oil prices soared 10% during the trading session following sanctions against Russia and the failure of negotiations with Iran that sparked stagflation concerns for global stock markets.
Moreover, the Euro continues in a downward momentum and commodities rise when the Russo-Ukrainian war still shows no signs of ending.
The Oil Situation That Will Have An Impact
Brent oil price traded as high as $ 12.73 at $ 130.84 while US crude oil rose $ 9.92 at $ 125.60.
Bank of America (BfoA) chief economist Ethan Harris said if Western powers blocked all energy imports from Russia, it would deal a strong blow to global markets.
He added that the loss of 5 million barrels of oil from Russia would cause oil prices to double to $ 200 a barrel and slow down world economic growth.
In addition, it also affected the prices of other commodities, with nickel up 19%, aluminum 15%, zinc 12% and copper 8% last week while wheat futures 60% and corn 15%.
As a result, US consumer price data to be released this week is expected to show annual growth at 7.9% and core measure at 6.4%.
The Shaky Euro
S&P 500 futures were down 1.1% while Nasdaq Composite futures were down 1.4%.
Japan's Nikkei futures traded around 300 points below the cash close on Friday while U.S. treasury futures jumped 10 points as investors turned to safe-haven assets.
Meanwhile, the European central bank (ECB) will hold a meeting this week.
NAB economist Tapas Strickland argues that the ECB may maintain maximum flexibility with its asset purchase program at 20 billion Euros in Q2 and at the same time effectively push the timing of rate hikes.
Meanwhile, the dovish ECB short-term outlook and safe-haven flow drove German 10-year bond yields down 32 basis points while US yields fell 23 basis points at 1.738%.
The euro increasingly traded weaker and fell 3% last week to its lowest level since 2020.
The euro ended 0.6% weaker at $ 1.0864 while the dollar index continued to strengthen 2.3% at 98,812, a result of a strong US NFP jobs report boost.
Gold continued to benefit as a safe-haven by rising 0.7% at $ 1,983 per ounce.
