Market Analysis

Crude oil prices ease down due to fears of Russia-Ukraine conflict

OIL
WTI crude oil prices eased down after reaching a fresh multi-year maximum during early Monday trading. There is unease in the markets over the possibility of a Russian invasion of Ukraine – which according to several Western governments is imminent – and the impact such a development may have on an already tight market. A Russian move on Ukraine would be likely to push the price of the barrel well above the $100 a barrel mark, as Western sanctions would severely limit Russian oil and gas output, compounding the supply-side issues that have driven global energy prices up.

Ricardo Evangelista – Senior Analyst, ActivTrades

Source: ActivTrader

 

GOLD
Early Monday trading saw gold hedging down from the 2022 maximums reached on Friday, albeit not by much as geopolitical tension continues to build up. Russia’s invasion of Ukraine is, according to several Western authorities, imminent, and the markets are reacting by seeking safe-haven assets, in a dynamic that strongly supports the precious metal. However, gold gains are somehow limited by the other dominant narrative of the moment, the threat of inflation and the pace and timing of the US Federal Reserve’s monetary tightening. Investors remain alert to the possibility that the Fed is about to move decisively, and hike rates quicker and more often than previously expected. Against such a backdrop the dollar continues to gain ground over other major currencies, limiting gold gains due to the inverted correlation between the two assets.

Ricardo Evangelista – Senior Analyst, ActivTrades

Source: ActivTrader

 

EUROPEAN SHARES 
Share markets traded significantly lower on Monday, alongside Asian benchmarks while US Futures hold losses registered at the end of last week amid a growing risk-off trading mood. Investors faced a sea of red on global markets, with all sectors down, at the beginning of a new week in which market sentiment continues to be weighed down by worsening geopolitical tensions in Eastern Europe. Markets are extending the sell-off sparked last Friday after the US raised the prospect of an imminent Russian invasion in Ukraine, despite continuing talks on the diplomatic front. Commodities such as grain and energy, as well as precious metals, are among the top performers today as both Russia and Ukraine play a big part in their production and exports. In addition, the risk-off trading stance can also be noticed over other asset classes such as CHF, JPY as traders seek safer havens. That said, the fact Bond markets stopped rising while USD and EUR currencies remained stable tends to suggest a “fear trading” mood which would signal the current sell-off in equities as temporary.

Pierre Veyret– Technical analyst, ActivTrades

Source: ActivTrader

 

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