Oil jumps above US$107 as Asia sells off, Fed and BOJ rate decisions now collide with a fresh energy shock Markets are opening the week under renewed pressure. Brent crude has jumped about 3% to above US$107 , Asian equities are falling sharply, and U.S. Treasury yields remain close to 5%. At the same time, investors are preparing for possible rate hikes from both the Federal Reserve and Bank of Japan this week . For investors, the central question has become: Can central banks contain inflation without causing a much larger slowdown when energy prices are surging at the same time? 30-second market snapshot Market / Asset Latest 🇺🇸 S&P 500 7,656.98, +0.86% Friday 🇺🇸 Dow Jones +0.98% Friday 🇺🇸 Nasdaq +0.96% Friday 🇲🇾 FBM KLCI 1,686.74, -1.10% Friday 🇯🇵 Nikkei -1.7% Monday morning 🇰🇷 Kospi -3.3% Monday morning 🌏 MSCI Asia ex-Japan -0.8% 🛢️ Brent crude ~US$107.36, +2.6% 🛢️ WTI crude ~US$102.48, +2.4% 🇺🇸 U.S. 10Y Treasury ~4.97% 🥇 Gold ~US$4,336...
Well, the oil price drop definitely hurt Russia.
Then, we have the sanctions.
We also have the sharp drop in the Russia's Rubble currency.
What's next?
HIGHER PRICES FOR EVERYTHING!
The Russians definitely are feeling the pinch now, as they are facing higher prices for everything.
It's more expensive to buy eggs, dairy products, poultry and vegetables now. Apple halted the online store there, just three weeks after an increase in the price of an iPhone 6 for about 25% to 39,990 rubles...even then, the value of that iPhone sales when converted to dollar already has plummeted to about $585 from $847.
The same thing goes to McDonald's. The company increase the price of Big Mac by 2.2% to about 94 rubles....only to see the value drop from $1.77 to $1.35 in the intervening days.
Renault-brand cars have been increased by 8% in Russia.
Now, most Russians believe they have to snap up consumer goods before prices continue to go up.
The ruble yesterday sank beyond 80 per dollar, a record low, before rebounding after Economy Minister Alexei Ulyukayev denied the government would turn to impose restrictions to stop Russians from converting money into dollars.
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