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Market Review

US: The most punishing market selloff in years showed no signs of abating Monday, with U.S. stock indexes sliding to new lows for 2022 and other assets, like oil and bitcoin, tumbling as well.

Asia: Shares in Asia-Pacific fell during Tuesday morning trade after heavy losses overnight on Wall Street that saw the techheavy Nasdaq Composite dropping more than 4%.

India: India's benchmark indices ended lower Monday but off low, largely led by losses in index heavyweight RIL. Market is expected to open on a negative note and likely to witness selling pressure during the day.

Global Economy: U.S. Treasury yields eased on Monday after the benchmark 10-year note hit fresh 3-1/2 year highs as inflation fears continued to roil markets. Ten-year Treasury yields fell 4.1 basis points to 3.083%, after hitting 3.203%, a level last seen in November 2018. The long end of the yield curve has been steepening, pushing the gap between two- and 30-year notes up from a low of 38.76 on Friday to a high of 61.87 on Monday. Yields on Treasury debt have roughly doubled since early March when the Federal Reserve took a hawkish stance and began hiking interest rates for the first time since late 2018 to curb soaring inflation. China's export growth slowed to single digits, the weakest in almost two years, while imports barely changed in April as tighter and wider COVID-19 curbs halted factory production and crimped domestic demand, adding to wider economic woes. Exports in dollar terms grew 3.9% in April from a year earlier, dropping sharply from the 14.7% growth reported in March, slowest pace since June 2020. Imports were broadly stable year-on-year, improving slightly from a 0.1% fall in March.

Commodities: Oil prices edged lower in early Asian trade on Tuesday, adding to a 6% slump in the previous session, as coronavirus lockdowns in top oil importer China and potential economic ructions in Europe fed worries about the demand outlook. Gold prices firmed on Tuesday as a decline in U.S. Treasury yields offset pressure on greenback-priced bullion from sustained strength in the dollar.

Currency: EUR/USD remains indecisive after testing the bears of late. The pair stays defensive around mid-1.0500s as global markets consolidate recent moves during Tuesday’s Asian session, following a stellar show of risk-aversion the previous day.

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