Paris: Today’s Market-Russian Sanctions, Oil, Gold, Bitcoin

According to UK Senior Market Analysts Craig Erlam and OANDA’s EMEA.

European markets entered the bear market territory earlier this week as panic began openly in response to reports that the United States was considering imposing a ban on Russia’s oil imports.

To make matters worse, the report seems to suggest that Europe is considering similar actions, which will be a big blow to Russian producers and the economy. This will also be a major issue for Europe, which currently lacks choices.

Early reports showed oil prices soaring, Brent approaching $ 140 a barrel at the time of opening, and the stock market plunging. It is this kind of event risk that investors are afraid of every Friday. Because it causes a huge kneeling reaction with open and large spreads, worse than what is commonly seen that week.

And that’s exactly what we saw today. The calm of dust eased the fear of Europe’s ban on Russian oil and the possibility of retaliation and follow-up on gas and other commodities. This development was aided by comments from German Finance Minister Christian Lindner. He said his country opposed any attempt to stop Russia’s oil and gas imports.

In the morning we saw the first move quite subdued. Europe is now relatively flat, like US futures, and sentiment continues to be driven by a steady stream of aggression-related headlines. For example, if Ukraine changed its constitution and refused to request participation in the block, Russia proposed to end the aggression immediately, recognizing Crimea as Russia and Donets’k and Luhansk as independent states. It doesn’t really fill me with hope.

Oil prices remain high, but return huge initial profits

At some point after opening, oil prices rose by more than 17%, but as the days went by, the rise diminished, with Brent rising 1.5% at around $ 120 a barrel. To show how ridiculous the situation is, it is a relief from the former situation.

However, the market shows a vulnerable side, which is very worrisome. On the one hand, without German support, the EU’s ban on Russia’s oil imports is very unlikely and it will take years to abandon the pivot. However, much has happened in the last two weeks, and it seems unlikely a month ago, and the situation continues to evolve rapidly.

Oil price risk continues to rise. Downside risk is primarily related to the search for commonalities between Ukraine and Russia and is unlikely to occur given current requirements. Even nuclear deals only provide partial relief from Russia’s supply turmoil, which is not even going as expected.

Gold cuts profits, but records are visible

Gold temporarily surpassed $ 2,000 earlier that day as the stock market was desperate over the prospect of Europe banning Russia’s oil. Between inflation and the economic consequences of such measures, the trader quickly turned to his old friend, Gold. At the end of the morning and calming down, the price of gold followed, with yellow metal now seeing only a slight rise of about $ 1,975.

However, the situation is still very uncertain and the market is so volatile that gold should continue to gain strong support. The highest prices in history are not far away, and in the current environment they are likely to be broken at some point.

Bitcoin readjusts with risky assets

Bitcoin has been very successful over the past week with reports that cryptocurrencies are using cryptocurrencies to avoid sanctions and protect liquidity during these volatile times in Eastern Europe. increase. Bitcoin has been separated to some extent from the risky assets it has strongly linked to so far this year. But that didn’t seem to last long, and the risk aversion that swept the market from the end of last week to the beginning of this year seems to have dragged Bitcoin down. After appearing to be above $ 45,500 from time to time last week, it is below $ 40,000 and again looks vulnerable to further attacks of risk aversion.

Translated at (free version)

See our economic calendar for an overview of all the economic events of the day: