Asian stocks halted and oil prices fell on Monday as a coronavirus lockdown in Shanghai threatened to disrupt business worldwide while putting another wrench into supply chains, perhaps adding to inflationary pressures.

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In a two-stage shutdown lasting nine days, China’s financial centre of 26 million people directed all enterprises to halt operations or have employees work remotely.

Brent declined $3.68 to $116.97 due to the expansion of curbs in the world’s largest oil importer, while US crude fell $3.30 to $110.60.

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Hopes for progress in Russian-Ukrainian peace negotiations this week in Turkey boosted risk sentiment after President Volodymyr Zelensky indicated Ukraine was willing to explore adopting a neutral status as part of a settlement.

MSCI’s broadest index of Asia-Pacific equities outside Japan fell 0.1% in early trading on Monday. The index is down 2.3% for the month, but it is still much higher than previous lows.

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The Nikkei 225 index in Japan fell 0.4% but remains over 6% higher for the month as the yen fell, promising to increase exporter earnings. S&P 500 stock futures slid 0.2%, while Nasdaq futures fell 0.3%.

So far, Wall Street has shown itself to be extremely robust in the face of a significantly more hawkish Federal Reserve. Markets anticipate eight hikes in the remaining six policy meetings this year, bringing the funds rate to 2.50-2.75%.

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The 10-year Treasury yields surged 33 basis points last week and are now at 2.48%, up 66 basis points for the month. This has pushed up mortgage rates in the United States.

The Japanese yen has been the biggest loser in currency markets, as officials hold rates around zero and commodity prices skyrocket, sending the country’s import bill skyrocketing.

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This month, the dollar has risen 6.2% against the yen to 122.18, while the resource-rich Australian dollar has risen over 10% to 91.88 yen.

Even the generally struggling euro is up 4% against the yen this month, trading at 134.27. In the same period, the euro has lost around 2.1% against the dollar, but it is still trading at $1.0980, which is higher than the previous two-year low of $1.0804.

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The drop in the yen has left the US dollar index at 98.848, up 2.2% for the month. In commodity markets, gold was flat at $1,955 per ounce, up around 2.5% for the month.