China COVID cases rise, markets on edge
|Markets are in a state of flux and stocks on Wall Street closed lower, as investors grappled with China's shutdown due to Covid flare-ups that could pressure supply chain issues once again. China's capital warned on Monday that it was facing its most severe test of the COVID-19 pandemic. Markets have their doubts about whether the global economy can withstand the central bank's hiking cycles and soaring inflation without sparking a recession. Financial markets are seeking to find the balance between the room for further rate hikes versus the extent to which the US and global economy will slow.
Meanwhile, China is fighting numerous COVID-19 fresh waves, from Zhengzhou in central Henan province to Chongqing in the southwest. It also recorded two deaths in Beijing, which was China's first since late May. The southern Chinese metropolis of Guangzhou locked down its largest district on Monday testing China's attempt to bring a more targeted approach to its zero-COVID policies which calls for cities to be more targeted in their clampdown measuresGuangzhou reported 8,210 new local Covid-19 cases as of 0:00 November 2.
On the flip side, the People's Bank of China is seeking financial support to stabilise the economy whereby an additional 200bn yuan loan to help support property projects int he nation in a troubled sector.
Oil pressured
Oil prices also slipped on Monday amid investor concern over the economic fallout from the intensifying COVID situation in China, with the risk aversion benefiting bonds and the US Dollar. ''Beijing city officials warned it faces the most severe and complication situation of the pandemic,'' analysts at ANZ Bank explained. ''The People’s Daily reported that while two-thirds of Chinese aged 80 and above are fully vaccinated, only 40% are boosted. The current outbreak is threatening to undo the optimism following China’s move to a lighter-touch COVID-zero policy. A looming EU ban on Russian oil imports and a G7 price cap plan are clouding the outlook.''
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