Europe in technical bear market. Gold and oil renew lows – Markets in a minute

Band of “hawks” rolls oil barrel: black gold returns to January

Oil, traded in both London and New York, renews lows from January this year, heading for the longest streak of weekly losses this year.

The West Texas Intermediate (WTI) – traded in New York – lost 5.74% to US$78.70 per barrel, while the North Sea Brent – ​​reference for European imports fell 4.99% to US$85.95 per barrel. barrel.

The movement of black gold on a downward trajectory comes at a time when the market is reacting to a week marked by unrest in the world of monetary policy.

Altogether, in the last few days, only the central banks of the world’s major economies have jointly raised key interest rates by 350 basis points.

Since the monetary tightening movement began, the monetary authorities of the 10 largest developed economies in the world have increased the key interest rates by 1,965 basis points in total.

The tightening of monetary policy around the world has led investors to fear an economic slowdown and, in the case of some regions of the world, such as the Euro Zone, to anticipate an inevitable recession which will have as a consequence the reduction in demand for black gold.

In the US, the US Federal Reserve (Fed) has signaled, after raising the federal funds rate by 75 basis points this week, that it is ready to tolerate a recession if necessary to fight inflation.

As John Kilduff, founding partner of Again Capital, warns, using interest rates “as a hammer for the global economy” can reduce economic activity. “That’s why we are seeing the sell-off”, concludes the specialist in statements to Bloomberg.

Black gold is on track for its first quarterly loss in more than two years.

In addition to the effect caused by the fear of economic slowdown, oil is still being penalized by the dollar’s rally, driven by the Fed’s policy, making raw materials traded on the green note more expensive for those who trade in other currencies.