Energy crisis to worsen as Russia cuts German gas supply [Video]

Ipek Ozkardeskaya Swissquote Bank Ltd

Sentiment is better, but the news is not. The latest flash PMI readings from Japan to Europe and to the US showed a slowing global activity in June.

The slowing activity, and the call for a global recession started pressuring oil and commodity prices to the downside.

Norway delivered a bigger than expected 50bp hike, and Banxico rose by 75bp hike, the country’s biggest rate hike ever.

Plus, Moscow cuts the gas supply to Germany via Nord Stream 1, leading to another spike in the European natural gas futures.

The higher gas prices should keep the pressure high for oil, as although the prospects of demand are being cut, the production remains limited to the refining capacity.

European and US futures hint at a hopefully calm session before the weekly closing bell, and we don’t have much on today’s economic calendar.

In the FX, the US dollar hasn’t recorded a fresh high since about ten days, and the prospects of slowing US growth, the rising probability of recession, and the hawkish tone from other major central banks should prevent the greenback from gaining a fresh positive momentum.

Author

Ipek Ozkardeskaya

Swissquote Bank Ltd

Ipek Ozkardeskaya began her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked in HSBC Private Bank in Geneva in relation to high and ultra-high-net-worth clients.

EUR/USD deflates to fresh lows, targets 1.1600

The selling pressure on EUR/USD now gathers extra pace, prompting the pair to hit fresh multi-week lows in the 1.1625-1.1620 band on Friday. The continuation of the downward bias comes in response to further gains in the US Dollar as market participants continue to assess the mixed release of US Nonfarm Payrolls in December.

GBP/USD breaks below 1.3400, challenges the 200-day SMA

GBP/USD remains under heavy fire and retreats for the fourth consecutive day on Friday. Indeed, Cable suffers the strong performance of the Greenback, intensified post-mixed NFP, and trades at shouting distance from its critical 200-day SMA near 1.3380.

Gold flirts with yearly tops around $4,500

Gold keeps its positive bias on Friday, adding to Thursday’s advance and challenging yearly highs in the $4,500 region per troy ounce. The risk-off sentiment favours the yellow metal despite the firmer tone in the Greenback and rising US Treasury yields.