The collapse of oil prices by about
The collapse of oil prices by about 20% on the prospect of increased production in Saudi Arabia hit the stock market
Italy continues to respond to the most serious coronavirus outbreak outside of China
The introduction of the quarantine, which covered about 17 million people, on Sunday caused confusion as transport continued to operate, no quarantine enforcement measures were taken and Italians wondered how it would work.
A government decree that came into effect on Sunday prohibited entry or exit from the northern regions of Italy, which include the major cities of Milan, Venice, Parma and much of the country's industrial areas.
Residents of the quarantine zone are not allowed to travel even within the quarantine zone, working Italians are required to take vacations, and elderly and at-risk individuals are required to stay at home. In case of need, the police and the army may be involved in the quarantine. Violators of the new rules may face up to three months in prison.
Despite the severity of the decree, the effectiveness of these measures is questionable. On Sunday afternoon, there were no signs of quarantine enforcement in the north of the country. Milan Central Station continued to operate, receiving and dispatching trains, while police did not control the movement of passengers.
Oil prices in Asia dropped sharply to new multi-year lows
This signals traders' fears that growing disagreements between Saudi Arabia and Russia will lead to increased supply on the world oil market, where there is already an excess.
Oil prices began to fall after Saudi oil giant Aramco said over the weekend that it would mainly lower selling prices. Saudi officials also said that they plan to increase production. Such a decision by the world's largest oil exporter may lead to even greater price drops. Oil quotations have been declining for several weeks due to weakening demand amid the coronavirus outbreak, analysts said.
OPEC said that the price of Brent oil may reach a minimum of $ 30 per barrel amid a rupture in cooperation between Russia and OPEC. The cartel noted that although the cost of oil production in Russia is higher than in Saudi Arabia, the price of oil at which the Russian budget will be balanced is 42 dollars per barrel, while the kingdom needs the price of oil 83 dollars per barrel.
"This has allowed Russia to use its own methods against Saudi Arabia, despite OPEC's plans to reduce production, which were discussed before Friday's meeting," said economist Howie Lee of OCBC.
Gold prices earlier in Asia reached a new 7-year high and then retreated from it. Fears of a price war in the oil market as the economy slows down due to an outbreak of coronavirus make this precious metal a safe haven asset, which is in high demand.
The collapse of oil prices by about 20% on the prospect of increased production in Saudi Arabia hit the stock market, provoking a new wave of increased demand for treasury bonds and other assets of refuge.
Futures on American equities fell by 5%, which is the maximum allowable fall in one session.
Investors are responding to Saudi Arabia's decision to lower oil prices and increase oil production, despite the threat of continued low demand due to the new coronavirus epidemic. Trading in futures linked to the S&P 500 index has been limited. The last time such a restriction was imposed in 2016, shortly after Donald Trump was elected president of the United States.
American government bonds, which have already jumped to unprecedented heights, continue to grow. The yields on 10-year Treasury bonds fell by 0.239 percentage points to 0.529% and 30-year bonds to 1.028%.
In the Asia-Pacific region, Australia's S&P/ASX 200 lost over 5%. Japan's Nikkei 225 fell by more than 4%, while the yen, which tends to show growth during market turmoil, strengthened to below 104 per dollar.