The global oil complex appears to have reoriented around the Russian disruption reasonably well, with India and China (among others) buying more (cheap) Russian crude and making products from other sources available to European buyers.
However, prices remain top-heavy as elevated stagflationary pressures in Europe will worsen considerably if Russia cuts off the gas flow, making this the perfect storm scenario to send recessionary shock waves around the globe. And over the weekend, headlines about covid-19 cases in China continue to sully the view.
The sentiment improvement driven by Friday’s robust US payroll data was short-lived, with macro assets turning risk-off. Multiple currencies such as EUR, CE3 and CLP are testing new low dollar is strengthening against both G10 and EM currencies as the risk of renewed covid restrictions in China fuels concerns about the global growth outlook.