Asian markets could trade choppily ahead of a short week with Easter and China’s Ching Ming Festival Holiday. Trading volumes are declining after a volatile session around the energy sector. Oil benchmarks saw a price surge on Monday, following the weekend announcement of voluntary output cuts by OPEC+ members totalling over one mln BPD to year-end. Higher oil prices for longer periods could ultimately lead to a global economic contraction and potentially higher sticker inflation.
Nevertheless, given the current market uncertainty, the White House does not believe that OPEC production cuts are advisable. Still, it has maintained relations with Saudi Arabia, which gave the US a heads-up on the OPEC+ production cut plan. Finally, traders will be positioning on thin liquidity for key US economic data, where the release of March employment data scheduled for Friday, with an estimated +240k, may further impact the USD and bond market if a beat on the pack of data surprises participants and policymakers, forcing a hawkish reprice of the short-term rates.
