Month: June 2022

Equities set for most significant quarterly drop in many years on recession fears

Posted on by Vrasidas Neofytou

Meanwhile, the tech-heavy Nasdaq Composite is ready to post the worst quarter since 2008, down 20% over the last three months since the recession fears, and the higher rates are hitting hard the tech names.

Looking at the European markets, the German DAX is losing more than 2% on Thursday morning and it’s on course to end June with more than 10% losses as we have already seen evidence of a slowdown in the German retail sales which dropped 3,6% on the year in May, while the French CAC and UK’s FTSE 100 are currently posting monthly losses of 8% and 6% respectively.

A similar bearish picture could be seen in Asian markets, with S. Korea’s Kospi losing almost 2% today, while Japan’s Nikkei 225 index settled down by 1,5% on the last trading day of the month after Japan’s industrial production plunged 7,2% in May which could have been affected by lockdowns in China.

S&P 500 index, Daily chart

The U.S. stock indices are preparing to close out their worst first half of the year since 1970, with the S&P 500 down about 20% in 2022 so far, the industrial Dow Jones to be on track for its worst three-month period since the first quarter of 2020 when Covid lockdowns sent stocks tumbling.

Meanwhile, the tech-heavy Nasdaq Composite is ready to post the worst quarter since 2008, down 20% over the last three months since the recession fears, and the higher rates are hitting hard the tech names.

Looking at the European markets, the German DAX is losing more than 2% on Thursday morning and it’s on course to end June with more than 10% losses as we have already seen evidence of a slowdown in the German retail sales which dropped 3,6% on the year in May, while the French CAC and UK’s FTSE 100 are currently posting monthly losses of 8% and 6% respectively.

A similar bearish picture could be seen in Asian markets, with S. Korea’s Kospi losing almost 2% today, while Japan’s Nikkei 225 index settled down by 1,5% on the last trading day of the month after Japan’s industrial production plunged 7,2% in May which could have been affected by lockdowns in China.

S&P 500 index, Daily chart

The U.S. stock indices are preparing to close out their worst first half of the year since 1970, with the S&P 500 down about 20% in 2022 so far, the industrial Dow Jones to be on track for its worst three-month period since the first quarter of 2020 when Covid lockdowns sent stocks tumbling.

Meanwhile, the tech-heavy Nasdaq Composite is ready to post the worst quarter since 2008, down 20% over the last three months since the recession fears, and the higher rates are hitting hard the tech names.

Looking at the European markets, the German DAX is losing more than 2% on Thursday morning and it’s on course to end June with more than 10% losses as we have already seen evidence of a slowdown in the German retail sales which dropped 3,6% on the year in May, while the French CAC and UK’s FTSE 100 are currently posting monthly losses of 8% and 6% respectively.

A similar bearish picture could be seen in Asian markets, with S. Korea’s Kospi losing almost 2% today, while Japan’s Nikkei 225 index settled down by 1,5% on the last trading day of the month after Japan’s industrial production plunged 7,2% in May which could have been affected by lockdowns in China.

Market reaction:

Following the gloomy market sentiment and the recent selloffs, the major equity indices in the U.S., Asia, and Europe are on course to post significant losses in Q2, 2022, which ends today, Thursday, June 30.

S&P 500 index, Daily chart

The U.S. stock indices are preparing to close out their worst first half of the year since 1970, with the S&P 500 down about 20% in 2022 so far, the industrial Dow Jones to be on track for its worst three-month period since the first quarter of 2020 when Covid lockdowns sent stocks tumbling.

Meanwhile, the tech-heavy Nasdaq Composite is ready to post the worst quarter since 2008, down 20% over the last three months since the recession fears, and the higher rates are hitting hard the tech names.

Looking at the European markets, the German DAX is losing more than 2% on Thursday morning and it’s on course to end June with more than 10% losses as we have already seen evidence of a slowdown in the German retail sales which dropped 3,6% on the year in May, while the French CAC and UK’s FTSE 100 are currently posting monthly losses of 8% and 6% respectively.

A similar bearish picture could be seen in Asian markets, with S. Korea’s Kospi losing almost 2% today, while Japan’s Nikkei 225 index settled down by 1,5% on the last trading day of the month after Japan’s industrial production plunged 7,2% in May which could have been affected by lockdowns in China.

Hence, the Federal Reserve Bank of Cleveland President Loretta Mester said yesterday that she will advocate for a 75-basis point hike to interest rates at the central bank’s July meeting if economic conditions remain the same by then.

Market reaction:

Following the gloomy market sentiment and the recent selloffs, the major equity indices in the U.S., Asia, and Europe are on course to post significant losses in Q2, 2022, which ends today, Thursday, June 30.

S&P 500 index, Daily chart

The U.S. stock indices are preparing to close out their worst first half of the year since 1970, with the S&P 500 down about 20% in 2022 so far, the industrial Dow Jones to be on track for its worst three-month period since the first quarter of 2020 when Covid lockdowns sent stocks tumbling.

Meanwhile, the tech-heavy Nasdaq Composite is ready to post the worst quarter since 2008, down 20% over the last three months since the recession fears, and the higher rates are hitting hard the tech names.

Looking at the European markets, the German DAX is losing more than 2% on Thursday morning and it’s on course to end June with more than 10% losses as we have already seen evidence of a slowdown in the German retail sales which dropped 3,6% on the year in May, while the French CAC and UK’s FTSE 100 are currently posting monthly losses of 8% and 6% respectively.

A similar bearish picture could be seen in Asian markets, with S. Korea’s Kospi losing almost 2% today, while Japan’s Nikkei 225 index settled down by 1,5% on the last trading day of the month after Japan’s industrial production plunged 7,2% in May which could have been affected by lockdowns in China.

The investment sentiment deteriorated today after the Fed’s chair Powell’s speech at the ECB forum, warning that a broader economic slowdown could be a “likely” outcome of the aggressive monetary policy actions aimed at curbing the soaring prices.

Hence, the Federal Reserve Bank of Cleveland President Loretta Mester said yesterday that she will advocate for a 75-basis point hike to interest rates at the central bank’s July meeting if economic conditions remain the same by then.

Market reaction:

Following the gloomy market sentiment and the recent selloffs, the major equity indices in the U.S., Asia, and Europe are on course to post significant losses in Q2, 2022, which ends today, Thursday, June 30.

S&P 500 index, Daily chart

The U.S. stock indices are preparing to close out their worst first half of the year since 1970, with the S&P 500 down about 20% in 2022 so far, the industrial Dow Jones to be on track for its worst three-month period since the first quarter of 2020 when Covid lockdowns sent stocks tumbling.

Meanwhile, the tech-heavy Nasdaq Composite is ready to post the worst quarter since 2008, down 20% over the last three months since the recession fears, and the higher rates are hitting hard the tech names.

Looking at the European markets, the German DAX is losing more than 2% on Thursday morning and it’s on course to end June with more than 10% losses as we have already seen evidence of a slowdown in the German retail sales which dropped 3,6% on the year in May, while the French CAC and UK’s FTSE 100 are currently posting monthly losses of 8% and 6% respectively.

A similar bearish picture could be seen in Asian markets, with S. Korea’s Kospi losing almost 2% today, while Japan’s Nikkei 225 index settled down by 1,5% on the last trading day of the month after Japan’s industrial production plunged 7,2% in May which could have been affected by lockdowns in China.

Investors have turned away recently from risky assets such as stocks, cryptocurrencies, and growth-sensitive currencies to assets that offer security in periods of uncertainty such as gold, bonds, U.S dollar, Swiss Franc, and some inflation-hedged commodities such as crude oil.

The investment sentiment deteriorated today after the Fed’s chair Powell’s speech at the ECB forum, warning that a broader economic slowdown could be a “likely” outcome of the aggressive monetary policy actions aimed at curbing the soaring prices.

Hence, the Federal Reserve Bank of Cleveland President Loretta Mester said yesterday that she will advocate for a 75-basis point hike to interest rates at the central bank’s July meeting if economic conditions remain the same by then.

Market reaction:

Following the gloomy market sentiment and the recent selloffs, the major equity indices in the U.S., Asia, and Europe are on course to post significant losses in Q2, 2022, which ends today, Thursday, June 30.

S&P 500 index, Daily chart

The U.S. stock indices are preparing to close out their worst first half of the year since 1970, with the S&P 500 down about 20% in 2022 so far, the industrial Dow Jones to be on track for its worst three-month period since the first quarter of 2020 when Covid lockdowns sent stocks tumbling.

Meanwhile, the tech-heavy Nasdaq Composite is ready to post the worst quarter since 2008, down 20% over the last three months since the recession fears, and the higher rates are hitting hard the tech names.

Looking at the European markets, the German DAX is losing more than 2% on Thursday morning and it’s on course to end June with more than 10% losses as we have already seen evidence of a slowdown in the German retail sales which dropped 3,6% on the year in May, while the French CAC and UK’s FTSE 100 are currently posting monthly losses of 8% and 6% respectively.

A similar bearish picture could be seen in Asian markets, with S. Korea’s Kospi losing almost 2% today, while Japan’s Nikkei 225 index settled down by 1,5% on the last trading day of the month after Japan’s industrial production plunged 7,2% in May which could have been affected by lockdowns in China.

A risk aversion sentiment weighs on the global financial markets on the growing concerns that the aggressive monetary tightening by central banks to curb the 40-year high inflation combined with the ongoing Ukraine war and energy crisis will cause a severe global economic slowdown or a recession.

Investors have turned away recently from risky assets such as stocks, cryptocurrencies, and growth-sensitive currencies to assets that offer security in periods of uncertainty such as gold, bonds, U.S dollar, Swiss Franc, and some inflation-hedged commodities such as crude oil.

The investment sentiment deteriorated today after the Fed’s chair Powell’s speech at the ECB forum, warning that a broader economic slowdown could be a “likely” outcome of the aggressive monetary policy actions aimed at curbing the soaring prices.

Hence, the Federal Reserve Bank of Cleveland President Loretta Mester said yesterday that she will advocate for a 75-basis point hike to interest rates at the central bank’s July meeting if economic conditions remain the same by then.

Market reaction:

Following the gloomy market sentiment and the recent selloffs, the major equity indices in the U.S., Asia, and Europe are on course to post significant losses in Q2, 2022, which ends today, Thursday, June 30.

S&P 500 index, Daily chart

The U.S. stock indices are preparing to close out their worst first half of the year since 1970, with the S&P 500 down about 20% in 2022 so far, the industrial Dow Jones to be on track for its worst three-month period since the first quarter of 2020 when Covid lockdowns sent stocks tumbling.

Meanwhile, the tech-heavy Nasdaq Composite is ready to post the worst quarter since 2008, down 20% over the last three months since the recession fears, and the higher rates are hitting hard the tech names.

Looking at the European markets, the German DAX is losing more than 2% on Thursday morning and it’s on course to end June with more than 10% losses as we have already seen evidence of a slowdown in the German retail sales which dropped 3,6% on the year in May, while the French CAC and UK’s FTSE 100 are currently posting monthly losses of 8% and 6% respectively.

A similar bearish picture could be seen in Asian markets, with S. Korea’s Kospi losing almost 2% today, while Japan’s Nikkei 225 index settled down by 1,5% on the last trading day of the month after Japan’s industrial production plunged 7,2% in May which could have been affected by lockdowns in China.

Global equities are posting steep losses on Thursday morning, the final trading day of the month and the first half of the year, as investors worry over the global economy’s health and the aggressive rate hikes.

A risk aversion sentiment weighs on the global financial markets on the growing concerns that the aggressive monetary tightening by central banks to curb the 40-year high inflation combined with the ongoing Ukraine war and energy crisis will cause a severe global economic slowdown or a recession.

Investors have turned away recently from risky assets such as stocks, cryptocurrencies, and growth-sensitive currencies to assets that offer security in periods of uncertainty such as gold, bonds, U.S dollar, Swiss Franc, and some inflation-hedged commodities such as crude oil.

The investment sentiment deteriorated today after the Fed’s chair Powell’s speech at the ECB forum, warning that a broader economic slowdown could be a “likely” outcome of the aggressive monetary policy actions aimed at curbing the soaring prices.

Hence, the Federal Reserve Bank of Cleveland President Loretta Mester said yesterday that she will advocate for a 75-basis point hike to interest rates at the central bank’s July meeting if economic conditions remain the same by then.

Market reaction:

Following the gloomy market sentiment and the recent selloffs, the major equity indices in the U.S., Asia, and Europe are on course to post significant losses in Q2, 2022, which ends today, Thursday, June 30.

S&P 500 index, Daily chart

The U.S. stock indices are preparing to close out their worst first half of the year since 1970, with the S&P 500 down about 20% in 2022 so far, the industrial Dow Jones to be on track for its worst three-month period since the first quarter of 2020 when Covid lockdowns sent stocks tumbling.

Meanwhile, the tech-heavy Nasdaq Composite is ready to post the worst quarter since 2008, down 20% over the last three months since the recession fears, and the higher rates are hitting hard the tech names.

Looking at the European markets, the German DAX is losing more than 2% on Thursday morning and it’s on course to end June with more than 10% losses as we have already seen evidence of a slowdown in the German retail sales which dropped 3,6% on the year in May, while the French CAC and UK’s FTSE 100 are currently posting monthly losses of 8% and 6% respectively.

A similar bearish picture could be seen in Asian markets, with S. Korea’s Kospi losing almost 2% today, while Japan’s Nikkei 225 index settled down by 1,5% on the last trading day of the month after Japan’s industrial production plunged 7,2% in May which could have been affected by lockdowns in China.

Global equities are posting steep losses on Thursday morning, the final trading day of the month and the first half of the year, as investors worry over the global economy’s health and the aggressive rate hikes.

A risk aversion sentiment weighs on the global financial markets on the growing concerns that the aggressive monetary tightening by central banks to curb the 40-year high inflation combined with the ongoing Ukraine war and energy crisis will cause a severe global economic slowdown or a recession.

Investors have turned away recently from risky assets such as stocks, cryptocurrencies, and growth-sensitive currencies to assets that offer security in periods of uncertainty such as gold, bonds, U.S dollar, Swiss Franc, and some inflation-hedged commodities such as crude oil.

The investment sentiment deteriorated today after the Fed’s chair Powell’s speech at the ECB forum, warning that a broader economic slowdown could be a “likely” outcome of the aggressive monetary policy actions aimed at curbing the soaring prices.

Hence, the Federal Reserve Bank of Cleveland President Loretta Mester said yesterday that she will advocate for a 75-basis point hike to interest rates at the central bank’s July meeting if economic conditions remain the same by then.

Market reaction:

Following the gloomy market sentiment and the recent selloffs, the major equity indices in the U.S., Asia, and Europe are on course to post significant losses in Q2, 2022, which ends today, Thursday, June 30.

S&P 500 index, Daily chart

The U.S. stock indices are preparing to close out their worst first half of the year since 1970, with the S&P 500 down about 20% in 2022 so far, the industrial Dow Jones to be on track for its worst three-month period since the first quarter of 2020 when Covid lockdowns sent stocks tumbling.

Meanwhile, the tech-heavy Nasdaq Composite is ready to post the worst quarter since 2008, down 20% over the last three months since the recession fears, and the higher rates are hitting hard the tech names.

Looking at the European markets, the German DAX is losing more than 2% on Thursday morning and it’s on course to end June with more than 10% losses as we have already seen evidence of a slowdown in the German retail sales which dropped 3,6% on the year in May, while the French CAC and UK’s FTSE 100 are currently posting monthly losses of 8% and 6% respectively.

A similar bearish picture could be seen in Asian markets, with S. Korea’s Kospi losing almost 2% today, while Japan’s Nikkei 225 index settled down by 1,5% on the last trading day of the month after Japan’s industrial production plunged 7,2% in May which could have been affected by lockdowns in China.

Global equities are posting steep losses on Thursday morning, the final trading day of the month and the first half of the year, as investors worry over the global economy’s health and the aggressive rate hikes.

A risk aversion sentiment weighs on the global financial markets on the growing concerns that the aggressive monetary tightening by central banks to curb the 40-year high inflation combined with the ongoing Ukraine war and energy crisis will cause a severe global economic slowdown or a recession.

Investors have turned away recently from risky assets such as stocks, cryptocurrencies, and growth-sensitive currencies to assets that offer security in periods of uncertainty such as gold, bonds, U.S dollar, Swiss Franc, and some inflation-hedged commodities such as crude oil.

The investment sentiment deteriorated today after the Fed’s chair Powell’s speech at the ECB forum, warning that a broader economic slowdown could be a “likely” outcome of the aggressive monetary policy actions aimed at curbing the soaring prices.

Hence, the Federal Reserve Bank of Cleveland President Loretta Mester said yesterday that she will advocate for a 75-basis point hike to interest rates at the central bank’s July meeting if economic conditions remain the same by then.

Market reaction:

Following the gloomy market sentiment and the recent selloffs, the major equity indices in the U.S., Asia, and Europe are on course to post significant losses in Q2, 2022, which ends today, Thursday, June 30.

S&P 500 index, Daily chart

The U.S. stock indices are preparing to close out their worst first half of the year since 1970, with the S&P 500 down about 20% in 2022 so far, the industrial Dow Jones to be on track for its worst three-month period since the first quarter of 2020 when Covid lockdowns sent stocks tumbling.

Meanwhile, the tech-heavy Nasdaq Composite is ready to post the worst quarter since 2008, down 20% over the last three months since the recession fears, and the higher rates are hitting hard the tech names.

Looking at the European markets, the German DAX is losing more than 2% on Thursday morning and it’s on course to end June with more than 10% losses as we have already seen evidence of a slowdown in the German retail sales which dropped 3,6% on the year in May, while the French CAC and UK’s FTSE 100 are currently posting monthly losses of 8% and 6% respectively.

A similar bearish picture could be seen in Asian markets, with S. Korea’s Kospi losing almost 2% today, while Japan’s Nikkei 225 index settled down by 1,5% on the last trading day of the month after Japan’s industrial production plunged 7,2% in May which could have been affected by lockdowns in China.

Brent crude tops $117 after the G7 price cap and supply shortages

Posted on by Vrasidas Neofytou

G7 price cap proposal:

The price of the Brent contract rose to $117/b on Tuesday after the leaders of the Group of Seven rich nations, including the U.S, France, Germany, UK, Italy, Japan, and Canada promised to tighten the squeeze on Russia’s petroleum revenues with new sanctions which could limit Moscow’s ability to fund its invasion of Ukraine, that include a plan to cap the price of Russian oil and gas.

The G7 also promised to bring more global supply online from producing countries that have an oil embargo like Iran and Venezuela to lower energy prices to contain inflation ahead of the winter in the Northern Hemisphere.

According to IEA’s June monthly report, Russian oil export revenues climbed in May even though sanctions reduced its export volumes, since a $35/b discounted Russian oil and gas find buyers from India and China.

Political unrest adds to supply shortages woes:

Unexpected production disruptions in Ecuador and Libya have given a push on the oil prices lately, deteriorating the undersupplied condition in the physical market.

According to cnbc.com, Libya’s National Oil Corp said on Monday it might have to declare force majeure in the Gulf of Sirte area within the next three days unless production and shipping resume at oil terminals there.

On top of that, Ecuador, a former OPEC member which produces around 500k bpd, might suspend oil production completely within 48 hours amid anti-government protests that have seen at least six people die.

OPEC meeting ahead:

OPEC group and its allies including Russia, known as OPEC+, will meet on Thursday and they might decide to stick to a plan for accelerated oil output increases in August.

According to sources quoted by Reuters, OPEC plus is reducing their 2022 market surplus this week from 1.4 million bpd to 1 million bpd.

Brent crude, 2-hour chart

Tight supply worries and political unrest outweigh recession fears, helping the Brent and WTI crude oil prices to bounce off last week’s lows of $107/b and $101/b respectively hit by worries for lower petroleum demand in case of a global economic slowdown.

G7 price cap proposal:

The price of the Brent contract rose to $117/b on Tuesday after the leaders of the Group of Seven rich nations, including the U.S, France, Germany, UK, Italy, Japan, and Canada promised to tighten the squeeze on Russia’s petroleum revenues with new sanctions which could limit Moscow’s ability to fund its invasion of Ukraine, that include a plan to cap the price of Russian oil and gas.

The G7 also promised to bring more global supply online from producing countries that have an oil embargo like Iran and Venezuela to lower energy prices to contain inflation ahead of the winter in the Northern Hemisphere.

According to IEA’s June monthly report, Russian oil export revenues climbed in May even though sanctions reduced its export volumes, since a $35/b discounted Russian oil and gas find buyers from India and China.

Political unrest adds to supply shortages woes:

Unexpected production disruptions in Ecuador and Libya have given a push on the oil prices lately, deteriorating the undersupplied condition in the physical market.

According to cnbc.com, Libya’s National Oil Corp said on Monday it might have to declare force majeure in the Gulf of Sirte area within the next three days unless production and shipping resume at oil terminals there.

On top of that, Ecuador, a former OPEC member which produces around 500k bpd, might suspend oil production completely within 48 hours amid anti-government protests that have seen at least six people die.

OPEC meeting ahead:

OPEC group and its allies including Russia, known as OPEC+, will meet on Thursday and they might decide to stick to a plan for accelerated oil output increases in August.

According to sources quoted by Reuters, OPEC plus is reducing their 2022 market surplus this week from 1.4 million bpd to 1 million bpd.

Brent crude, 2-hour chart

Tight supply worries and political unrest outweigh recession fears, helping the Brent and WTI crude oil prices to bounce off last week’s lows of $107/b and $101/b respectively hit by worries for lower petroleum demand in case of a global economic slowdown.

G7 price cap proposal:

The price of the Brent contract rose to $117/b on Tuesday after the leaders of the Group of Seven rich nations, including the U.S, France, Germany, UK, Italy, Japan, and Canada promised to tighten the squeeze on Russia’s petroleum revenues with new sanctions which could limit Moscow’s ability to fund its invasion of Ukraine, that include a plan to cap the price of Russian oil and gas.

The G7 also promised to bring more global supply online from producing countries that have an oil embargo like Iran and Venezuela to lower energy prices to contain inflation ahead of the winter in the Northern Hemisphere.

According to IEA’s June monthly report, Russian oil export revenues climbed in May even though sanctions reduced its export volumes, since a $35/b discounted Russian oil and gas find buyers from India and China.

Political unrest adds to supply shortages woes:

Unexpected production disruptions in Ecuador and Libya have given a push on the oil prices lately, deteriorating the undersupplied condition in the physical market.

According to cnbc.com, Libya’s National Oil Corp said on Monday it might have to declare force majeure in the Gulf of Sirte area within the next three days unless production and shipping resume at oil terminals there.

On top of that, Ecuador, a former OPEC member which produces around 500k bpd, might suspend oil production completely within 48 hours amid anti-government protests that have seen at least six people die.

OPEC meeting ahead:

OPEC group and its allies including Russia, known as OPEC+, will meet on Thursday and they might decide to stick to a plan for accelerated oil output increases in August.

According to sources quoted by Reuters, OPEC plus is reducing their 2022 market surplus this week from 1.4 million bpd to 1 million bpd.

The international oil benchmark Brent bounced to $117/b, and the U.S.-based WTI recovered above $110/b on Tuesday morning, following the decision of the G7 nations to explore a cap to the price of Russian oil which is related to the conflict in Ukraine, together with the production shortages by Libya and Ecuador which could tighten supply further.

Brent crude, 2-hour chart

Tight supply worries and political unrest outweigh recession fears, helping the Brent and WTI crude oil prices to bounce off last week’s lows of $107/b and $101/b respectively hit by worries for lower petroleum demand in case of a global economic slowdown.

G7 price cap proposal:

The price of the Brent contract rose to $117/b on Tuesday after the leaders of the Group of Seven rich nations, including the U.S, France, Germany, UK, Italy, Japan, and Canada promised to tighten the squeeze on Russia’s petroleum revenues with new sanctions which could limit Moscow’s ability to fund its invasion of Ukraine, that include a plan to cap the price of Russian oil and gas.

The G7 also promised to bring more global supply online from producing countries that have an oil embargo like Iran and Venezuela to lower energy prices to contain inflation ahead of the winter in the Northern Hemisphere.

According to IEA’s June monthly report, Russian oil export revenues climbed in May even though sanctions reduced its export volumes, since a $35/b discounted Russian oil and gas find buyers from India and China.

Political unrest adds to supply shortages woes:

Unexpected production disruptions in Ecuador and Libya have given a push on the oil prices lately, deteriorating the undersupplied condition in the physical market.

According to cnbc.com, Libya’s National Oil Corp said on Monday it might have to declare force majeure in the Gulf of Sirte area within the next three days unless production and shipping resume at oil terminals there.

On top of that, Ecuador, a former OPEC member which produces around 500k bpd, might suspend oil production completely within 48 hours amid anti-government protests that have seen at least six people die.

OPEC meeting ahead:

OPEC group and its allies including Russia, known as OPEC+, will meet on Thursday and they might decide to stick to a plan for accelerated oil output increases in August.

According to sources quoted by Reuters, OPEC plus is reducing their 2022 market surplus this week from 1.4 million bpd to 1 million bpd.

The international oil benchmark Brent bounced to $117/b, and the U.S.-based WTI recovered above $110/b on Tuesday morning, following the decision of the G7 nations to explore a cap to the price of Russian oil which is related to the conflict in Ukraine, together with the production shortages by Libya and Ecuador which could tighten supply further.

Brent crude, 2-hour chart

Tight supply worries and political unrest outweigh recession fears, helping the Brent and WTI crude oil prices to bounce off last week’s lows of $107/b and $101/b respectively hit by worries for lower petroleum demand in case of a global economic slowdown.

G7 price cap proposal:

The price of the Brent contract rose to $117/b on Tuesday after the leaders of the Group of Seven rich nations, including the U.S, France, Germany, UK, Italy, Japan, and Canada promised to tighten the squeeze on Russia’s petroleum revenues with new sanctions which could limit Moscow’s ability to fund its invasion of Ukraine, that include a plan to cap the price of Russian oil and gas.

The G7 also promised to bring more global supply online from producing countries that have an oil embargo like Iran and Venezuela to lower energy prices to contain inflation ahead of the winter in the Northern Hemisphere.

According to IEA’s June monthly report, Russian oil export revenues climbed in May even though sanctions reduced its export volumes, since a $35/b discounted Russian oil and gas find buyers from India and China.

Political unrest adds to supply shortages woes:

Unexpected production disruptions in Ecuador and Libya have given a push on the oil prices lately, deteriorating the undersupplied condition in the physical market.

According to cnbc.com, Libya’s National Oil Corp said on Monday it might have to declare force majeure in the Gulf of Sirte area within the next three days unless production and shipping resume at oil terminals there.

On top of that, Ecuador, a former OPEC member which produces around 500k bpd, might suspend oil production completely within 48 hours amid anti-government protests that have seen at least six people die.

OPEC meeting ahead:

OPEC group and its allies including Russia, known as OPEC+, will meet on Thursday and they might decide to stick to a plan for accelerated oil output increases in August.

According to sources quoted by Reuters, OPEC plus is reducing their 2022 market surplus this week from 1.4 million bpd to 1 million bpd.

Grains on track to lose post-Ukraine war gains

Posted on by Vrasidas Neofytou

Bearish momentum has been seen in Soybean futures as well, with the price falling to as low as $1,400/bushel for the first time since the end of January 2022, down nearly 20% from its peak of $1,750/bushel hit on the day of the Russian invasion of Ukraine on February 24.

Let’s remind that the grain prices climbed to multi-year highs after a military conflict between Russia and Ukraine cut grain shipments from the Ukrainian ports of the Black Sea, especially from the port of Odesa, at a time of dry conditions in Europe and hotter-than-normal temperatures in India, Brazil, and the U.S. deteriorated the crop yield forecasts for mid-2022, increasing the risks for a global food crisis.

Wheat contract, Daily chart

A similar picture in the other main crop of Corn, which plunged below the $7/bushel key support level for the first time since early March this morning, down almost 15% from its recent high of $8,25/bushel hit on April 29, 2022.

Bearish momentum has been seen in Soybean futures as well, with the price falling to as low as $1,400/bushel for the first time since the end of January 2022, down nearly 20% from its peak of $1,750/bushel hit on the day of the Russian invasion of Ukraine on February 24.

Let’s remind that the grain prices climbed to multi-year highs after a military conflict between Russia and Ukraine cut grain shipments from the Ukrainian ports of the Black Sea, especially from the port of Odesa, at a time of dry conditions in Europe and hotter-than-normal temperatures in India, Brazil, and the U.S. deteriorated the crop yield forecasts for mid-2022, increasing the risks for a global food crisis.

Wheat contract, Daily chart

A similar picture in the other main crop of Corn, which plunged below the $7/bushel key support level for the first time since early March this morning, down almost 15% from its recent high of $8,25/bushel hit on April 29, 2022.

Bearish momentum has been seen in Soybean futures as well, with the price falling to as low as $1,400/bushel for the first time since the end of January 2022, down nearly 20% from its peak of $1,750/bushel hit on the day of the Russian invasion of Ukraine on February 24.

Let’s remind that the grain prices climbed to multi-year highs after a military conflict between Russia and Ukraine cut grain shipments from the Ukrainian ports of the Black Sea, especially from the port of Odesa, at a time of dry conditions in Europe and hotter-than-normal temperatures in India, Brazil, and the U.S. deteriorated the crop yield forecasts for mid-2022, increasing the risks for a global food crisis.

Commodities investors have started closing their winning-long positions in grains from the beginning of June, with some of them being on track to pared back almost all their post-Ukraine war gains.

The most-active Wheat contract on the Chicago Board of Trade (CBOT) fell to as low as $9.20/bushel on Monday morning, down almost 30% from its Ukraine-war high of $13,50/bushel hit on March 08, 2022.

Wheat contract, Daily chart

A similar picture in the other main crop of Corn, which plunged below the $7/bushel key support level for the first time since early March this morning, down almost 15% from its recent high of $8,25/bushel hit on April 29, 2022.

Bearish momentum has been seen in Soybean futures as well, with the price falling to as low as $1,400/bushel for the first time since the end of January 2022, down nearly 20% from its peak of $1,750/bushel hit on the day of the Russian invasion of Ukraine on February 24.

Let’s remind that the grain prices climbed to multi-year highs after a military conflict between Russia and Ukraine cut grain shipments from the Ukrainian ports of the Black Sea, especially from the port of Odesa, at a time of dry conditions in Europe and hotter-than-normal temperatures in India, Brazil, and the U.S. deteriorated the crop yield forecasts for mid-2022, increasing the risks for a global food crisis.

Market reaction:

Commodities investors have started closing their winning-long positions in grains from the beginning of June, with some of them being on track to pared back almost all their post-Ukraine war gains.

The most-active Wheat contract on the Chicago Board of Trade (CBOT) fell to as low as $9.20/bushel on Monday morning, down almost 30% from its Ukraine-war high of $13,50/bushel hit on March 08, 2022.

Wheat contract, Daily chart

A similar picture in the other main crop of Corn, which plunged below the $7/bushel key support level for the first time since early March this morning, down almost 15% from its recent high of $8,25/bushel hit on April 29, 2022.

Bearish momentum has been seen in Soybean futures as well, with the price falling to as low as $1,400/bushel for the first time since the end of January 2022, down nearly 20% from its peak of $1,750/bushel hit on the day of the Russian invasion of Ukraine on February 24.

Let’s remind that the grain prices climbed to multi-year highs after a military conflict between Russia and Ukraine cut grain shipments from the Ukrainian ports of the Black Sea, especially from the port of Odesa, at a time of dry conditions in Europe and hotter-than-normal temperatures in India, Brazil, and the U.S. deteriorated the crop yield forecasts for mid-2022, increasing the risks for a global food crisis.

Wheat and corn prices have stabilized to near record highs in the last three months as the robust grain exports from some producers such as Romania, Bulgaria, France, Russia, Argentina, U.S., India, and Australia offset some of the missed Black Sea grain shipments, squeezed by Russia’s invasion of Ukraine.

Market reaction:

Commodities investors have started closing their winning-long positions in grains from the beginning of June, with some of them being on track to pared back almost all their post-Ukraine war gains.

The most-active Wheat contract on the Chicago Board of Trade (CBOT) fell to as low as $9.20/bushel on Monday morning, down almost 30% from its Ukraine-war high of $13,50/bushel hit on March 08, 2022.

Wheat contract, Daily chart

A similar picture in the other main crop of Corn, which plunged below the $7/bushel key support level for the first time since early March this morning, down almost 15% from its recent high of $8,25/bushel hit on April 29, 2022.

Bearish momentum has been seen in Soybean futures as well, with the price falling to as low as $1,400/bushel for the first time since the end of January 2022, down nearly 20% from its peak of $1,750/bushel hit on the day of the Russian invasion of Ukraine on February 24.

Let’s remind that the grain prices climbed to multi-year highs after a military conflict between Russia and Ukraine cut grain shipments from the Ukrainian ports of the Black Sea, especially from the port of Odesa, at a time of dry conditions in Europe and hotter-than-normal temperatures in India, Brazil, and the U.S. deteriorated the crop yield forecasts for mid-2022, increasing the risks for a global food crisis.

The grain prices are retreating from their yearly highs as the global market is expected to be better supplied with grains in the following months following the larger-than-expected winter grain harvest in parts of Europe, Russia, Kazakhstan, and North America in response to record high prices and the unexpected higher export volumes from Russia to North African and Middle East countries despite the sanctions.

Wheat and corn prices have stabilized to near record highs in the last three months as the robust grain exports from some producers such as Romania, Bulgaria, France, Russia, Argentina, U.S., India, and Australia offset some of the missed Black Sea grain shipments, squeezed by Russia’s invasion of Ukraine.

Market reaction:

Commodities investors have started closing their winning-long positions in grains from the beginning of June, with some of them being on track to pared back almost all their post-Ukraine war gains.

The most-active Wheat contract on the Chicago Board of Trade (CBOT) fell to as low as $9.20/bushel on Monday morning, down almost 30% from its Ukraine-war high of $13,50/bushel hit on March 08, 2022.

Wheat contract, Daily chart

A similar picture in the other main crop of Corn, which plunged below the $7/bushel key support level for the first time since early March this morning, down almost 15% from its recent high of $8,25/bushel hit on April 29, 2022.

Bearish momentum has been seen in Soybean futures as well, with the price falling to as low as $1,400/bushel for the first time since the end of January 2022, down nearly 20% from its peak of $1,750/bushel hit on the day of the Russian invasion of Ukraine on February 24.

Let’s remind that the grain prices climbed to multi-year highs after a military conflict between Russia and Ukraine cut grain shipments from the Ukrainian ports of the Black Sea, especially from the port of Odesa, at a time of dry conditions in Europe and hotter-than-normal temperatures in India, Brazil, and the U.S. deteriorated the crop yield forecasts for mid-2022, increasing the risks for a global food crisis.

Grains have tumbled across the board in June with the prices of some main crops such as wheat, corn, and soybean falling to their lowest level since the start of the Russian invasion of Ukraine driven by the growing fears that a possible economic recession could hit grain demand and coupled with the larger-than-expected grain production in the northern hemisphere.

The grain prices are retreating from their yearly highs as the global market is expected to be better supplied with grains in the following months following the larger-than-expected winter grain harvest in parts of Europe, Russia, Kazakhstan, and North America in response to record high prices and the unexpected higher export volumes from Russia to North African and Middle East countries despite the sanctions.

Wheat and corn prices have stabilized to near record highs in the last three months as the robust grain exports from some producers such as Romania, Bulgaria, France, Russia, Argentina, U.S., India, and Australia offset some of the missed Black Sea grain shipments, squeezed by Russia’s invasion of Ukraine.

Market reaction:

Commodities investors have started closing their winning-long positions in grains from the beginning of June, with some of them being on track to pared back almost all their post-Ukraine war gains.

The most-active Wheat contract on the Chicago Board of Trade (CBOT) fell to as low as $9.20/bushel on Monday morning, down almost 30% from its Ukraine-war high of $13,50/bushel hit on March 08, 2022.

Wheat contract, Daily chart

A similar picture in the other main crop of Corn, which plunged below the $7/bushel key support level for the first time since early March this morning, down almost 15% from its recent high of $8,25/bushel hit on April 29, 2022.

Bearish momentum has been seen in Soybean futures as well, with the price falling to as low as $1,400/bushel for the first time since the end of January 2022, down nearly 20% from its peak of $1,750/bushel hit on the day of the Russian invasion of Ukraine on February 24.

Let’s remind that the grain prices climbed to multi-year highs after a military conflict between Russia and Ukraine cut grain shipments from the Ukrainian ports of the Black Sea, especially from the port of Odesa, at a time of dry conditions in Europe and hotter-than-normal temperatures in India, Brazil, and the U.S. deteriorated the crop yield forecasts for mid-2022, increasing the risks for a global food crisis.

Grains have tumbled across the board in June with the prices of some main crops such as wheat, corn, and soybean falling to their lowest level since the start of the Russian invasion of Ukraine driven by the growing fears that a possible economic recession could hit grain demand and coupled with the larger-than-expected grain production in the northern hemisphere.

The grain prices are retreating from their yearly highs as the global market is expected to be better supplied with grains in the following months following the larger-than-expected winter grain harvest in parts of Europe, Russia, Kazakhstan, and North America in response to record high prices and the unexpected higher export volumes from Russia to North African and Middle East countries despite the sanctions.

Wheat and corn prices have stabilized to near record highs in the last three months as the robust grain exports from some producers such as Romania, Bulgaria, France, Russia, Argentina, U.S., India, and Australia offset some of the missed Black Sea grain shipments, squeezed by Russia’s invasion of Ukraine.

Market reaction:

Commodities investors have started closing their winning-long positions in grains from the beginning of June, with some of them being on track to pared back almost all their post-Ukraine war gains.

The most-active Wheat contract on the Chicago Board of Trade (CBOT) fell to as low as $9.20/bushel on Monday morning, down almost 30% from its Ukraine-war high of $13,50/bushel hit on March 08, 2022.

Wheat contract, Daily chart

A similar picture in the other main crop of Corn, which plunged below the $7/bushel key support level for the first time since early March this morning, down almost 15% from its recent high of $8,25/bushel hit on April 29, 2022.

Bearish momentum has been seen in Soybean futures as well, with the price falling to as low as $1,400/bushel for the first time since the end of January 2022, down nearly 20% from its peak of $1,750/bushel hit on the day of the Russian invasion of Ukraine on February 24.

Let’s remind that the grain prices climbed to multi-year highs after a military conflict between Russia and Ukraine cut grain shipments from the Ukrainian ports of the Black Sea, especially from the port of Odesa, at a time of dry conditions in Europe and hotter-than-normal temperatures in India, Brazil, and the U.S. deteriorated the crop yield forecasts for mid-2022, increasing the risks for a global food crisis.

Grains have tumbled across the board in June with the prices of some main crops such as wheat, corn, and soybean falling to their lowest level since the start of the Russian invasion of Ukraine driven by the growing fears that a possible economic recession could hit grain demand and coupled with the larger-than-expected grain production in the northern hemisphere.

The grain prices are retreating from their yearly highs as the global market is expected to be better supplied with grains in the following months following the larger-than-expected winter grain harvest in parts of Europe, Russia, Kazakhstan, and North America in response to record high prices and the unexpected higher export volumes from Russia to North African and Middle East countries despite the sanctions.

Wheat and corn prices have stabilized to near record highs in the last three months as the robust grain exports from some producers such as Romania, Bulgaria, France, Russia, Argentina, U.S., India, and Australia offset some of the missed Black Sea grain shipments, squeezed by Russia’s invasion of Ukraine.

Market reaction:

Commodities investors have started closing their winning-long positions in grains from the beginning of June, with some of them being on track to pared back almost all their post-Ukraine war gains.

The most-active Wheat contract on the Chicago Board of Trade (CBOT) fell to as low as $9.20/bushel on Monday morning, down almost 30% from its Ukraine-war high of $13,50/bushel hit on March 08, 2022.

Wheat contract, Daily chart

A similar picture in the other main crop of Corn, which plunged below the $7/bushel key support level for the first time since early March this morning, down almost 15% from its recent high of $8,25/bushel hit on April 29, 2022.

Bearish momentum has been seen in Soybean futures as well, with the price falling to as low as $1,400/bushel for the first time since the end of January 2022, down nearly 20% from its peak of $1,750/bushel hit on the day of the Russian invasion of Ukraine on February 24.

Let’s remind that the grain prices climbed to multi-year highs after a military conflict between Russia and Ukraine cut grain shipments from the Ukrainian ports of the Black Sea, especially from the port of Odesa, at a time of dry conditions in Europe and hotter-than-normal temperatures in India, Brazil, and the U.S. deteriorated the crop yield forecasts for mid-2022, increasing the risks for a global food crisis.

Recession fears hit Crude oil and Copper prices

Posted on by Vrasidas Neofytou

Copper price, Daily chart

As a result, the economic slowdown fears weighed on the price of copper which retreated by more than 20% from its early March 2022 high of $5/lb, despite the recent weakness in the U.S. dollar, the concerns over the supply side issues and a miner’s strike on the largest copper mine in Chile.

Copper falls 20% from recent highs on recession fears:

The red metal which is called the “Dr. Copper” since it has been a barometer for the economic growth, hit a 16-month low of $3,84/lb on Thursday morning on worries that a potential global recession and the worsening economic outlook of China amid covid-led lockdowns, could slow down industrial and construction activity and reduce demand for base metals, including copper.

Copper price, Daily chart

As a result, the economic slowdown fears weighed on the price of copper which retreated by more than 20% from its early March 2022 high of $5/lb, despite the recent weakness in the U.S. dollar, the concerns over the supply side issues and a miner’s strike on the largest copper mine in Chile.

Oil prices have been also pressured by the fact that Russian crude still finds its way into the global markets, especially in Asian customers such as India and China in a deep $30/b discount or Africa and the Middle East for gasoline and naphtha, despite the sanctions from the western countries of Ukraine invasion.

Copper falls 20% from recent highs on recession fears:

The red metal which is called the “Dr. Copper” since it has been a barometer for the economic growth, hit a 16-month low of $3,84/lb on Thursday morning on worries that a potential global recession and the worsening economic outlook of China amid covid-led lockdowns, could slow down industrial and construction activity and reduce demand for base metals, including copper.

Copper price, Daily chart

As a result, the economic slowdown fears weighed on the price of copper which retreated by more than 20% from its early March 2022 high of $5/lb, despite the recent weakness in the U.S. dollar, the concerns over the supply side issues and a miner’s strike on the largest copper mine in Chile.

Yet, it was the WTI price that posted more enormous percentage losses vs Brent, falling to as low as $101/b before bouncing to $106/b, driven by the decision of U.S. President Joe Biden to pass a 3-month suspension of the federal gasoline tax to help fight record gasoline prices and provide temporary relief for American families this summer.

Oil prices have been also pressured by the fact that Russian crude still finds its way into the global markets, especially in Asian customers such as India and China in a deep $30/b discount or Africa and the Middle East for gasoline and naphtha, despite the sanctions from the western countries of Ukraine invasion.

Copper falls 20% from recent highs on recession fears:

The red metal which is called the “Dr. Copper” since it has been a barometer for the economic growth, hit a 16-month low of $3,84/lb on Thursday morning on worries that a potential global recession and the worsening economic outlook of China amid covid-led lockdowns, could slow down industrial and construction activity and reduce demand for base metals, including copper.

Copper price, Daily chart

As a result, the economic slowdown fears weighed on the price of copper which retreated by more than 20% from its early March 2022 high of $5/lb, despite the recent weakness in the U.S. dollar, the concerns over the supply side issues and a miner’s strike on the largest copper mine in Chile.

Brent crude, 1-hour chart

Yet, it was the WTI price that posted more enormous percentage losses vs Brent, falling to as low as $101/b before bouncing to $106/b, driven by the decision of U.S. President Joe Biden to pass a 3-month suspension of the federal gasoline tax to help fight record gasoline prices and provide temporary relief for American families this summer.

Oil prices have been also pressured by the fact that Russian crude still finds its way into the global markets, especially in Asian customers such as India and China in a deep $30/b discount or Africa and the Middle East for gasoline and naphtha, despite the sanctions from the western countries of Ukraine invasion.

Copper falls 20% from recent highs on recession fears:

The red metal which is called the “Dr. Copper” since it has been a barometer for the economic growth, hit a 16-month low of $3,84/lb on Thursday morning on worries that a potential global recession and the worsening economic outlook of China amid covid-led lockdowns, could slow down industrial and construction activity and reduce demand for base metals, including copper.

Copper price, Daily chart

As a result, the economic slowdown fears weighed on the price of copper which retreated by more than 20% from its early March 2022 high of $5/lb, despite the recent weakness in the U.S. dollar, the concerns over the supply side issues and a miner’s strike on the largest copper mine in Chile.

Brent crude, 1-hour chart

Yet, it was the WTI price that posted more enormous percentage losses vs Brent, falling to as low as $101/b before bouncing to $106/b, driven by the decision of U.S. President Joe Biden to pass a 3-month suspension of the federal gasoline tax to help fight record gasoline prices and provide temporary relief for American families this summer.

Oil prices have been also pressured by the fact that Russian crude still finds its way into the global markets, especially in Asian customers such as India and China in a deep $30/b discount or Africa and the Middle East for gasoline and naphtha, despite the sanctions from the western countries of Ukraine invasion.

Copper falls 20% from recent highs on recession fears:

The red metal which is called the “Dr. Copper” since it has been a barometer for the economic growth, hit a 16-month low of $3,84/lb on Thursday morning on worries that a potential global recession and the worsening economic outlook of China amid covid-led lockdowns, could slow down industrial and construction activity and reduce demand for base metals, including copper.

Copper price, Daily chart

As a result, the economic slowdown fears weighed on the price of copper which retreated by more than 20% from its early March 2022 high of $5/lb, despite the recent weakness in the U.S. dollar, the concerns over the supply side issues and a miner’s strike on the largest copper mine in Chile.

Brent oil briefly fell under $110/b:

Crude oil prices have been under pressure this week with Brent’s price falling from its monthly high of $125/b to a Wednesday low of $107/b, the lowest level since mid-May, before bouncing to near $112/b this morning on a “buy-the-dip” trade.

Brent crude, 1-hour chart

Yet, it was the WTI price that posted more enormous percentage losses vs Brent, falling to as low as $101/b before bouncing to $106/b, driven by the decision of U.S. President Joe Biden to pass a 3-month suspension of the federal gasoline tax to help fight record gasoline prices and provide temporary relief for American families this summer.

Oil prices have been also pressured by the fact that Russian crude still finds its way into the global markets, especially in Asian customers such as India and China in a deep $30/b discount or Africa and the Middle East for gasoline and naphtha, despite the sanctions from the western countries of Ukraine invasion.

Copper falls 20% from recent highs on recession fears:

The red metal which is called the “Dr. Copper” since it has been a barometer for the economic growth, hit a 16-month low of $3,84/lb on Thursday morning on worries that a potential global recession and the worsening economic outlook of China amid covid-led lockdowns, could slow down industrial and construction activity and reduce demand for base metals, including copper.

Copper price, Daily chart

As a result, the economic slowdown fears weighed on the price of copper which retreated by more than 20% from its early March 2022 high of $5/lb, despite the recent weakness in the U.S. dollar, the concerns over the supply side issues and a miner’s strike on the largest copper mine in Chile.

The policymakers and the governments are trying to curb inflation that hit 40-year highs by bringing prices under control even if doing so risks an economic downturn, forcing many commodities traders and hedge funds to close some winning positions on commodities and take some profits out of the sector.

Brent oil briefly fell under $110/b:

Crude oil prices have been under pressure this week with Brent’s price falling from its monthly high of $125/b to a Wednesday low of $107/b, the lowest level since mid-May, before bouncing to near $112/b this morning on a “buy-the-dip” trade.

Brent crude, 1-hour chart

Yet, it was the WTI price that posted more enormous percentage losses vs Brent, falling to as low as $101/b before bouncing to $106/b, driven by the decision of U.S. President Joe Biden to pass a 3-month suspension of the federal gasoline tax to help fight record gasoline prices and provide temporary relief for American families this summer.

Oil prices have been also pressured by the fact that Russian crude still finds its way into the global markets, especially in Asian customers such as India and China in a deep $30/b discount or Africa and the Middle East for gasoline and naphtha, despite the sanctions from the western countries of Ukraine invasion.

Copper falls 20% from recent highs on recession fears:

The red metal which is called the “Dr. Copper” since it has been a barometer for the economic growth, hit a 16-month low of $3,84/lb on Thursday morning on worries that a potential global recession and the worsening economic outlook of China amid covid-led lockdowns, could slow down industrial and construction activity and reduce demand for base metals, including copper.

Copper price, Daily chart

As a result, the economic slowdown fears weighed on the price of copper which retreated by more than 20% from its early March 2022 high of $5/lb, despite the recent weakness in the U.S. dollar, the concerns over the supply side issues and a miner’s strike on the largest copper mine in Chile.

Prices across the commodities sector have been retreating from their recent multi-year highs on growing fears that the aggressive interest rate hikes by most of the central banks of the world together with the surging inflation, the Ukraine war, and the soaring U.S. dollar would potentially push the global economy into a slowdown spiral or a recession and dent industrial metals and energy demand.

The policymakers and the governments are trying to curb inflation that hit 40-year highs by bringing prices under control even if doing so risks an economic downturn, forcing many commodities traders and hedge funds to close some winning positions on commodities and take some profits out of the sector.

Brent oil briefly fell under $110/b:

Crude oil prices have been under pressure this week with Brent’s price falling from its monthly high of $125/b to a Wednesday low of $107/b, the lowest level since mid-May, before bouncing to near $112/b this morning on a “buy-the-dip” trade.

Brent crude, 1-hour chart

Yet, it was the WTI price that posted more enormous percentage losses vs Brent, falling to as low as $101/b before bouncing to $106/b, driven by the decision of U.S. President Joe Biden to pass a 3-month suspension of the federal gasoline tax to help fight record gasoline prices and provide temporary relief for American families this summer.

Oil prices have been also pressured by the fact that Russian crude still finds its way into the global markets, especially in Asian customers such as India and China in a deep $30/b discount or Africa and the Middle East for gasoline and naphtha, despite the sanctions from the western countries of Ukraine invasion.

Copper falls 20% from recent highs on recession fears:

The red metal which is called the “Dr. Copper” since it has been a barometer for the economic growth, hit a 16-month low of $3,84/lb on Thursday morning on worries that a potential global recession and the worsening economic outlook of China amid covid-led lockdowns, could slow down industrial and construction activity and reduce demand for base metals, including copper.

Copper price, Daily chart

As a result, the economic slowdown fears weighed on the price of copper which retreated by more than 20% from its early March 2022 high of $5/lb, despite the recent weakness in the U.S. dollar, the concerns over the supply side issues and a miner’s strike on the largest copper mine in Chile.

Prices across the commodities sector have been retreating from their recent multi-year highs on growing fears that the aggressive interest rate hikes by most of the central banks of the world together with the surging inflation, the Ukraine war, and the soaring U.S. dollar would potentially push the global economy into a slowdown spiral or a recession and dent industrial metals and energy demand.

The policymakers and the governments are trying to curb inflation that hit 40-year highs by bringing prices under control even if doing so risks an economic downturn, forcing many commodities traders and hedge funds to close some winning positions on commodities and take some profits out of the sector.

Brent oil briefly fell under $110/b:

Crude oil prices have been under pressure this week with Brent’s price falling from its monthly high of $125/b to a Wednesday low of $107/b, the lowest level since mid-May, before bouncing to near $112/b this morning on a “buy-the-dip” trade.

Brent crude, 1-hour chart

Yet, it was the WTI price that posted more enormous percentage losses vs Brent, falling to as low as $101/b before bouncing to $106/b, driven by the decision of U.S. President Joe Biden to pass a 3-month suspension of the federal gasoline tax to help fight record gasoline prices and provide temporary relief for American families this summer.

Oil prices have been also pressured by the fact that Russian crude still finds its way into the global markets, especially in Asian customers such as India and China in a deep $30/b discount or Africa and the Middle East for gasoline and naphtha, despite the sanctions from the western countries of Ukraine invasion.

Copper falls 20% from recent highs on recession fears:

The red metal which is called the “Dr. Copper” since it has been a barometer for the economic growth, hit a 16-month low of $3,84/lb on Thursday morning on worries that a potential global recession and the worsening economic outlook of China amid covid-led lockdowns, could slow down industrial and construction activity and reduce demand for base metals, including copper.

Copper price, Daily chart

As a result, the economic slowdown fears weighed on the price of copper which retreated by more than 20% from its early March 2022 high of $5/lb, despite the recent weakness in the U.S. dollar, the concerns over the supply side issues and a miner’s strike on the largest copper mine in Chile.

Prices across the commodities sector have been retreating from their recent multi-year highs on growing fears that the aggressive interest rate hikes by most of the central banks of the world together with the surging inflation, the Ukraine war, and the soaring U.S. dollar would potentially push the global economy into a slowdown spiral or a recession and dent industrial metals and energy demand.

The policymakers and the governments are trying to curb inflation that hit 40-year highs by bringing prices under control even if doing so risks an economic downturn, forcing many commodities traders and hedge funds to close some winning positions on commodities and take some profits out of the sector.

Brent oil briefly fell under $110/b:

Crude oil prices have been under pressure this week with Brent’s price falling from its monthly high of $125/b to a Wednesday low of $107/b, the lowest level since mid-May, before bouncing to near $112/b this morning on a “buy-the-dip” trade.

Brent crude, 1-hour chart

Yet, it was the WTI price that posted more enormous percentage losses vs Brent, falling to as low as $101/b before bouncing to $106/b, driven by the decision of U.S. President Joe Biden to pass a 3-month suspension of the federal gasoline tax to help fight record gasoline prices and provide temporary relief for American families this summer.

Oil prices have been also pressured by the fact that Russian crude still finds its way into the global markets, especially in Asian customers such as India and China in a deep $30/b discount or Africa and the Middle East for gasoline and naphtha, despite the sanctions from the western countries of Ukraine invasion.

Copper falls 20% from recent highs on recession fears:

The red metal which is called the “Dr. Copper” since it has been a barometer for the economic growth, hit a 16-month low of $3,84/lb on Thursday morning on worries that a potential global recession and the worsening economic outlook of China amid covid-led lockdowns, could slow down industrial and construction activity and reduce demand for base metals, including copper.

Copper price, Daily chart

As a result, the economic slowdown fears weighed on the price of copper which retreated by more than 20% from its early March 2022 high of $5/lb, despite the recent weakness in the U.S. dollar, the concerns over the supply side issues and a miner’s strike on the largest copper mine in Chile.

Hard landing?

Posted on by George Kessarios

The above wording confirms my suspicion that the US economy is in worse shape that what Mr. Powell is telling us, and that achieving a soft landing is far-fetched. Then again, the above predictions are a function of the Fed’s forward guidance. In other words, if the Fed gets too spooked of the economic reality and backs-off (as I think it will at some point), then the above prediction will probably not happen.

The bottom line is that if the Fed continues its current path, not only will the US economy have negative GDP growth for the next 2 years, but a hard landing and a lot more economic pain is probably in the cards, according to the NY Fed.

Conversely, the chances of a hard landing—defined to include at least one quarter in the next ten in which four-quarter GDP growth dips below -1 percent, as occurred during the 1990 recession—are about 80 percent.”

So the NY Fed is telling us to expect 2 years of negative GDP growth, with the possibility of a 1990s recession at 80%.

The above wording confirms my suspicion that the US economy is in worse shape that what Mr. Powell is telling us, and that achieving a soft landing is far-fetched. Then again, the above predictions are a function of the Fed’s forward guidance. In other words, if the Fed gets too spooked of the economic reality and backs-off (as I think it will at some point), then the above prediction will probably not happen.

The bottom line is that if the Fed continues its current path, not only will the US economy have negative GDP growth for the next 2 years, but a hard landing and a lot more economic pain is probably in the cards, according to the NY Fed.

According to the model, the probability of a soft landing—defined as four-quarter GDP growth staying positive over the next ten quarters—is only about 10 percent.

Conversely, the chances of a hard landing—defined to include at least one quarter in the next ten in which four-quarter GDP growth dips below -1 percent, as occurred during the 1990 recession—are about 80 percent.”

So the NY Fed is telling us to expect 2 years of negative GDP growth, with the possibility of a 1990s recession at 80%.

The above wording confirms my suspicion that the US economy is in worse shape that what Mr. Powell is telling us, and that achieving a soft landing is far-fetched. Then again, the above predictions are a function of the Fed’s forward guidance. In other words, if the Fed gets too spooked of the economic reality and backs-off (as I think it will at some point), then the above prediction will probably not happen.

The bottom line is that if the Fed continues its current path, not only will the US economy have negative GDP growth for the next 2 years, but a hard landing and a lot more economic pain is probably in the cards, according to the NY Fed.

This disinflation path is accompanied by a not-so-soft landing: the model predicts modestly negative GDP growth in both 2022 (-0.6 percent versus 0.9 percent in March) and 2023 (-0.5 percent versus 1.2 percent).

According to the model, the probability of a soft landing—defined as four-quarter GDP growth staying positive over the next ten quarters—is only about 10 percent.

Conversely, the chances of a hard landing—defined to include at least one quarter in the next ten in which four-quarter GDP growth dips below -1 percent, as occurred during the 1990 recession—are about 80 percent.”

So the NY Fed is telling us to expect 2 years of negative GDP growth, with the possibility of a 1990s recession at 80%.

The above wording confirms my suspicion that the US economy is in worse shape that what Mr. Powell is telling us, and that achieving a soft landing is far-fetched. Then again, the above predictions are a function of the Fed’s forward guidance. In other words, if the Fed gets too spooked of the economic reality and backs-off (as I think it will at some point), then the above prediction will probably not happen.

The bottom line is that if the Fed continues its current path, not only will the US economy have negative GDP growth for the next 2 years, but a hard landing and a lot more economic pain is probably in the cards, according to the NY Fed.

“The model’s outlook is considerably more pessimistic than it was in March. It projects inflation to remain elevated in 2022 at 3.8 percent, up a full percentage point relative to March, and to decline only gradually toward 2 percent thereafter (2.5 and 2.1 percent in 2023 and 2024, respectively).

This disinflation path is accompanied by a not-so-soft landing: the model predicts modestly negative GDP growth in both 2022 (-0.6 percent versus 0.9 percent in March) and 2023 (-0.5 percent versus 1.2 percent).

According to the model, the probability of a soft landing—defined as four-quarter GDP growth staying positive over the next ten quarters—is only about 10 percent.

Conversely, the chances of a hard landing—defined to include at least one quarter in the next ten in which four-quarter GDP growth dips below -1 percent, as occurred during the 1990 recession—are about 80 percent.”

So the NY Fed is telling us to expect 2 years of negative GDP growth, with the possibility of a 1990s recession at 80%.

The above wording confirms my suspicion that the US economy is in worse shape that what Mr. Powell is telling us, and that achieving a soft landing is far-fetched. Then again, the above predictions are a function of the Fed’s forward guidance. In other words, if the Fed gets too spooked of the economic reality and backs-off (as I think it will at some point), then the above prediction will probably not happen.

The bottom line is that if the Fed continues its current path, not only will the US economy have negative GDP growth for the next 2 years, but a hard landing and a lot more economic pain is probably in the cards, according to the NY Fed.

The latest research from the Federal Reserve Bank of NY, based on their DSGE model is not good. And I quote from their most recent blog post:

“The model’s outlook is considerably more pessimistic than it was in March. It projects inflation to remain elevated in 2022 at 3.8 percent, up a full percentage point relative to March, and to decline only gradually toward 2 percent thereafter (2.5 and 2.1 percent in 2023 and 2024, respectively).

This disinflation path is accompanied by a not-so-soft landing: the model predicts modestly negative GDP growth in both 2022 (-0.6 percent versus 0.9 percent in March) and 2023 (-0.5 percent versus 1.2 percent).

According to the model, the probability of a soft landing—defined as four-quarter GDP growth staying positive over the next ten quarters—is only about 10 percent.

Conversely, the chances of a hard landing—defined to include at least one quarter in the next ten in which four-quarter GDP growth dips below -1 percent, as occurred during the 1990 recession—are about 80 percent.”

So the NY Fed is telling us to expect 2 years of negative GDP growth, with the possibility of a 1990s recession at 80%.

The above wording confirms my suspicion that the US economy is in worse shape that what Mr. Powell is telling us, and that achieving a soft landing is far-fetched. Then again, the above predictions are a function of the Fed’s forward guidance. In other words, if the Fed gets too spooked of the economic reality and backs-off (as I think it will at some point), then the above prediction will probably not happen.

The bottom line is that if the Fed continues its current path, not only will the US economy have negative GDP growth for the next 2 years, but a hard landing and a lot more economic pain is probably in the cards, according to the NY Fed.

One of the ways central banks break the ice to markets is via their research. While said research is not the official opinion of any Central Bank, it is nevertheless an outcome that is likely.

The latest research from the Federal Reserve Bank of NY, based on their DSGE model is not good. And I quote from their most recent blog post:

“The model’s outlook is considerably more pessimistic than it was in March. It projects inflation to remain elevated in 2022 at 3.8 percent, up a full percentage point relative to March, and to decline only gradually toward 2 percent thereafter (2.5 and 2.1 percent in 2023 and 2024, respectively).

This disinflation path is accompanied by a not-so-soft landing: the model predicts modestly negative GDP growth in both 2022 (-0.6 percent versus 0.9 percent in March) and 2023 (-0.5 percent versus 1.2 percent).

According to the model, the probability of a soft landing—defined as four-quarter GDP growth staying positive over the next ten quarters—is only about 10 percent.

Conversely, the chances of a hard landing—defined to include at least one quarter in the next ten in which four-quarter GDP growth dips below -1 percent, as occurred during the 1990 recession—are about 80 percent.”

So the NY Fed is telling us to expect 2 years of negative GDP growth, with the possibility of a 1990s recession at 80%.

The above wording confirms my suspicion that the US economy is in worse shape that what Mr. Powell is telling us, and that achieving a soft landing is far-fetched. Then again, the above predictions are a function of the Fed’s forward guidance. In other words, if the Fed gets too spooked of the economic reality and backs-off (as I think it will at some point), then the above prediction will probably not happen.

The bottom line is that if the Fed continues its current path, not only will the US economy have negative GDP growth for the next 2 years, but a hard landing and a lot more economic pain is probably in the cards, according to the NY Fed.

One of the ways central banks break the ice to markets is via their research. While said research is not the official opinion of any Central Bank, it is nevertheless an outcome that is likely.

The latest research from the Federal Reserve Bank of NY, based on their DSGE model is not good. And I quote from their most recent blog post:

“The model’s outlook is considerably more pessimistic than it was in March. It projects inflation to remain elevated in 2022 at 3.8 percent, up a full percentage point relative to March, and to decline only gradually toward 2 percent thereafter (2.5 and 2.1 percent in 2023 and 2024, respectively).

This disinflation path is accompanied by a not-so-soft landing: the model predicts modestly negative GDP growth in both 2022 (-0.6 percent versus 0.9 percent in March) and 2023 (-0.5 percent versus 1.2 percent).

According to the model, the probability of a soft landing—defined as four-quarter GDP growth staying positive over the next ten quarters—is only about 10 percent.

Conversely, the chances of a hard landing—defined to include at least one quarter in the next ten in which four-quarter GDP growth dips below -1 percent, as occurred during the 1990 recession—are about 80 percent.”

So the NY Fed is telling us to expect 2 years of negative GDP growth, with the possibility of a 1990s recession at 80%.

The above wording confirms my suspicion that the US economy is in worse shape that what Mr. Powell is telling us, and that achieving a soft landing is far-fetched. Then again, the above predictions are a function of the Fed’s forward guidance. In other words, if the Fed gets too spooked of the economic reality and backs-off (as I think it will at some point), then the above prediction will probably not happen.

The bottom line is that if the Fed continues its current path, not only will the US economy have negative GDP growth for the next 2 years, but a hard landing and a lot more economic pain is probably in the cards, according to the NY Fed.

One of the ways central banks break the ice to markets is via their research. While said research is not the official opinion of any Central Bank, it is nevertheless an outcome that is likely.

The latest research from the Federal Reserve Bank of NY, based on their DSGE model is not good. And I quote from their most recent blog post:

“The model’s outlook is considerably more pessimistic than it was in March. It projects inflation to remain elevated in 2022 at 3.8 percent, up a full percentage point relative to March, and to decline only gradually toward 2 percent thereafter (2.5 and 2.1 percent in 2023 and 2024, respectively).

This disinflation path is accompanied by a not-so-soft landing: the model predicts modestly negative GDP growth in both 2022 (-0.6 percent versus 0.9 percent in March) and 2023 (-0.5 percent versus 1.2 percent).

According to the model, the probability of a soft landing—defined as four-quarter GDP growth staying positive over the next ten quarters—is only about 10 percent.

Conversely, the chances of a hard landing—defined to include at least one quarter in the next ten in which four-quarter GDP growth dips below -1 percent, as occurred during the 1990 recession—are about 80 percent.”

So the NY Fed is telling us to expect 2 years of negative GDP growth, with the possibility of a 1990s recession at 80%.

The above wording confirms my suspicion that the US economy is in worse shape that what Mr. Powell is telling us, and that achieving a soft landing is far-fetched. Then again, the above predictions are a function of the Fed’s forward guidance. In other words, if the Fed gets too spooked of the economic reality and backs-off (as I think it will at some point), then the above prediction will probably not happen.

The bottom line is that if the Fed continues its current path, not only will the US economy have negative GDP growth for the next 2 years, but a hard landing and a lot more economic pain is probably in the cards, according to the NY Fed.

Japanese Yen falls to near 24-year low on ultra-dovish BOJ

Posted on by Vrasidas Neofytou

The DXY- U.S dollar index climbed to a two-decade high of 105,80 last week following the Federal Reserve’s biggest rate increase since 1995 of 0,75% to 1,5%-1,75%, which added a further pressure to the USD/JPY pair.

On top of that, the Japanese authorities have been concerning about the rapid weakness of the currency recently, and would appropriately respond to exchange market moves, if necessary, while the BOJ Governor Haruhiko Kuroda said on Monday that the rapid Yen moves had been undesirable.

USD/JPY pair, Daily chart

The BOJ’s reaffirmation of ultra-accommodative policy adds a huge pressure on the Yen which have lost more than 15% since May 01, at a time other major currencies such as U.S. dollar, Euro, Pound Sterling, and Swiss Franc are getting support from the hawkish stance by their central banks which have started hiking interest rates to curb inflation.

The DXY- U.S dollar index climbed to a two-decade high of 105,80 last week following the Federal Reserve’s biggest rate increase since 1995 of 0,75% to 1,5%-1,75%, which added a further pressure to the USD/JPY pair.

On top of that, the Japanese authorities have been concerning about the rapid weakness of the currency recently, and would appropriately respond to exchange market moves, if necessary, while the BOJ Governor Haruhiko Kuroda said on Monday that the rapid Yen moves had been undesirable.

USD/JPY pair, Daily chart

The BOJ’s reaffirmation of ultra-accommodative policy adds a huge pressure on the Yen which have lost more than 15% since May 01, at a time other major currencies such as U.S. dollar, Euro, Pound Sterling, and Swiss Franc are getting support from the hawkish stance by their central banks which have started hiking interest rates to curb inflation.

The DXY- U.S dollar index climbed to a two-decade high of 105,80 last week following the Federal Reserve’s biggest rate increase since 1995 of 0,75% to 1,5%-1,75%, which added a further pressure to the USD/JPY pair.

On top of that, the Japanese authorities have been concerning about the rapid weakness of the currency recently, and would appropriately respond to exchange market moves, if necessary, while the BOJ Governor Haruhiko Kuroda said on Monday that the rapid Yen moves had been undesirable.

The Japanese Yen hovers near a 24-year low of ¥135,60 to the U.S. dollar as the Bank of Japan retains its accommodative and ultra-dovish monetary policy at a time the greenback is getting support from the aggressive tightening stance by the Federal Reserve.

The USD/JPY fell to as low as ¥135,60 last week, the lowest level since October 1998, following the decision by the BOJ to maintain its ultra-low interest rates and vowed to defend its cap of 0,25% on 10-year JGBs-bond yields with unlimited buying, bucking a global wave of monetary tightening as it focused on supporting a tepid economic recovery after Covid pandemic.

USD/JPY pair, Daily chart

The BOJ’s reaffirmation of ultra-accommodative policy adds a huge pressure on the Yen which have lost more than 15% since May 01, at a time other major currencies such as U.S. dollar, Euro, Pound Sterling, and Swiss Franc are getting support from the hawkish stance by their central banks which have started hiking interest rates to curb inflation.

The DXY- U.S dollar index climbed to a two-decade high of 105,80 last week following the Federal Reserve’s biggest rate increase since 1995 of 0,75% to 1,5%-1,75%, which added a further pressure to the USD/JPY pair.

On top of that, the Japanese authorities have been concerning about the rapid weakness of the currency recently, and would appropriately respond to exchange market moves, if necessary, while the BOJ Governor Haruhiko Kuroda said on Monday that the rapid Yen moves had been undesirable.

The Japanese Yen hovers near a 24-year low of ¥135,60 to the U.S. dollar as the Bank of Japan retains its accommodative and ultra-dovish monetary policy at a time the greenback is getting support from the aggressive tightening stance by the Federal Reserve.

The USD/JPY fell to as low as ¥135,60 last week, the lowest level since October 1998, following the decision by the BOJ to maintain its ultra-low interest rates and vowed to defend its cap of 0,25% on 10-year JGBs-bond yields with unlimited buying, bucking a global wave of monetary tightening as it focused on supporting a tepid economic recovery after Covid pandemic.

USD/JPY pair, Daily chart

The BOJ’s reaffirmation of ultra-accommodative policy adds a huge pressure on the Yen which have lost more than 15% since May 01, at a time other major currencies such as U.S. dollar, Euro, Pound Sterling, and Swiss Franc are getting support from the hawkish stance by their central banks which have started hiking interest rates to curb inflation.

The DXY- U.S dollar index climbed to a two-decade high of 105,80 last week following the Federal Reserve’s biggest rate increase since 1995 of 0,75% to 1,5%-1,75%, which added a further pressure to the USD/JPY pair.

On top of that, the Japanese authorities have been concerning about the rapid weakness of the currency recently, and would appropriately respond to exchange market moves, if necessary, while the BOJ Governor Haruhiko Kuroda said on Monday that the rapid Yen moves had been undesirable.

The Japanese Yen hovers near a 24-year low of ¥135,60 to the U.S. dollar as the Bank of Japan retains its accommodative and ultra-dovish monetary policy at a time the greenback is getting support from the aggressive tightening stance by the Federal Reserve.

The USD/JPY fell to as low as ¥135,60 last week, the lowest level since October 1998, following the decision by the BOJ to maintain its ultra-low interest rates and vowed to defend its cap of 0,25% on 10-year JGBs-bond yields with unlimited buying, bucking a global wave of monetary tightening as it focused on supporting a tepid economic recovery after Covid pandemic.

USD/JPY pair, Daily chart

The BOJ’s reaffirmation of ultra-accommodative policy adds a huge pressure on the Yen which have lost more than 15% since May 01, at a time other major currencies such as U.S. dollar, Euro, Pound Sterling, and Swiss Franc are getting support from the hawkish stance by their central banks which have started hiking interest rates to curb inflation.

The DXY- U.S dollar index climbed to a two-decade high of 105,80 last week following the Federal Reserve’s biggest rate increase since 1995 of 0,75% to 1,5%-1,75%, which added a further pressure to the USD/JPY pair.

On top of that, the Japanese authorities have been concerning about the rapid weakness of the currency recently, and would appropriately respond to exchange market moves, if necessary, while the BOJ Governor Haruhiko Kuroda said on Monday that the rapid Yen moves had been undesirable.

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