SYDNEY : Oil prices soared and shares sank in hectic trading on Monday as the risk of a U.S. and European ban on Russian product and delays in Iranian talks triggered what was shaping up as a major stagflationary shock for world markets.
Having surged more than 10per cent in wild early action, Brent was last quoted $7.90 higher at $126.01, while U.S. crude rose $6.67 to $122.35. [O/R] "If the West cuts off most of Russia's energy exports it would be a major shock to global markets," said BofA chief economist Ethan Harris. That will only add to the global inflationary pulse with U.S. consumer price data this week expected to show annual growth at a stratospheric 7.9per cent, and the core measure at 6.4per cent."Given the potential for stagflation is very real, the ECB is likely to maintain maximum flexibility with its asset purchase programme at 20 billion euros through Q2 and potentially beyond, thus effectively pushing out the timing of rate hikes," said Tapas Strickland, an economist at NAB.
The euro was also tumbling against the Swiss franc to break under 1.0000 for the first time since early 2015.