Asian shares began the week on the back foot on Monday after a downbeat session on Wall Street, while the euro skidded to a fresh 12-year low on divergent monetary policy paths between the United States and the euro zone. Oil continued to tumble, with U.S. crude dropping more than 2 percent to a six-year low, after the International Energy Agency said on Friday that the global supply glut is growing and U.S. production shows no sign of slowing.
U.S. crude CLc1 dropped about 1.1 percent to $44.36 a barrel, while Brent crude LCOc1 lost about 0.9 percent to $54.16. MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was off its early lows but still down about 0.1 percent, pushing back toward last week’s seven-week trough.
Friday’s weak U.S. inflation data failed to derail expectations that the Federal Reserve will tighten monetary policy, and U.S. shares slumped on concerns about the impact of higher rates and a stronger dollar on corporate profits. The S&P 500 .SPX marked its third straight losing week, though it stood just 3 percent below its record high set early this month. Investors’ main focus this week is on the Fed’s two-day meeting beginning on Tuesday. After successive months of strong jobs data, expectations have been growing that the Fed will point towards a June rate rise by dropping a pledge to be “patient” in considering such a move.