Is it time to top-sell oil and commodities? [Video]

Ipek Ozkardeskaya Swissquote Bank Ltd

Joint decision from the US and the UK to ban Russian oil sent another shockwave to commodity prices yesterday.

The European natural gas prices spiked to all-time highs and crude oil rallied to $130 mark.

Stock markets are highly volatile as uncertainties loom. The European indices rally again this morning, BUT the rallies are mostly driven by intra-day trades, whereas longer-term investors are leaving the market; hedge funds and the like are reportedly cutting exposure and covering shorts as visibility became very limited.

The VIX index rises steadily, as the selloff in the stocks continue. The S&P500 started the day in the positive and ended 0.72% down, while Nasdaq lost some 0.30%.

What really boosts the optimism in the European markets is partly the news that the EU countries will be issuing a massive joint bond to finance energy and defense… so the European Central Bank (ECB) could potentially buy it!

Joke aside, the extra massive cash would add to the inflationary pressures in Europe and should, in theory, force the ECB to become more aggressive on its monetary policy despite the Ukrainian threat to the economic recovery.

The ECB hawks are therefore in charge of the market and the EURUSD is trading past the 1.09 mark since yesterday.

The US dollar index consolidates a touch below the 99 mark, gold spiked to $2070 an ounce & Bitcoin rallied after US Treasury Secretary Yellen accidentally published remarks revealing Biden's impending crypto order.

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.

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