Markets across the board have experienced volatility in recent weeks as overlapping crises of geopolitical tensions, the coronavirus pandemic and surging inflation dim global growth forecasts.
Oil prices pushed higher on Wednesday after sliding back sharply on jitters over tighter supplies after the International Monetary Fund (IMF) released its gloomy world economic outlook, and amid demand concerns out of China.
It comes as the IMF warned of "severe pressures" in commodity markets in its financial stability report on Tuesday.
The prices of commodities like wheat, nickel, aluminium and palladium have surged this year as economies shakes-off a pandemic-induced slump and Russia's invasion of Ukraine caused a key commodity-exporting region to be cut off from the rest of the world.
Natural gas prices slumped to their lowest levels since the start of the Ukraine conflict amid warmer weather and worries that Russian president Vladimir Putin could turn off the taps. Shipments from Russia, the bloc's largest supplier, remain in focus, especially following Putin’s demand last month that "unfriendly" nations pay for gas in rubles.
Benchmark European prices fell as much as 12%, the lowest level since 23 February, a day before the invasion started. Dutch gas futures gained 2% before trading 0.3% lower at €93.50 per megawatt-hour. The UK equivalent was up 2.1%.
Gold price (GC=F) remains vulnerable at the critical daily support amid mixed mood, declining as much as 1.4% before trading 0.6% lower to $1.946. The metal slipped from the key $2,000 mark for the second day in a row as anticipation of high inflation and multiple 50pbs rate hikes from the Federal Reserve adds pressure to the safe haven.
In foreign exchange markets, sterling (GBPUSD=X) could be poised to make a decisive break below $1.30 this week after the fifth straight day of losses against the dollar ahead of a speech by Bank of England governor Andrew Bailey on Thursday. The pound was up 0.1% against the dollar in early trade on Wednesday in London at $1.301, and little unchanged against the euro (EURGBP=X) at 83p.
"[Sterling] is still holding above the recent lows at 1.2970/80 but the lack of rebound keeps the prospect of a move towards 1.2800, said Michael Hewson, chief market analyst at CMC Markets. "A break below 1.2950 argues for a move towards 1.2800. We need to move above the 1.3150 area to stabilise."
Meanwhile, the world's largest crypto by market value, bitcoin (BTC-USD) continues to rebound from a five-week low of around $38,700 (£29,751) on Monday, up 1.5% to $41,381. Ethereum (ETH-USD) has surged nearly 7% in the last 24 hours, currently trading 1.6% higher to $3,093.
Bitcoin's march upwards follows analysts' warnings the crypto-market was teetering towards a prolonged bear cycle, pointing to the $400bn slashed from the combined crypto market since early April.
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