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Oil steadying

Oil prices are steadying again after a three-day decline that’s coincided with further concerns around the economic outlook and gloomy forecasts. The output cut from OPEC+ last week triggered a surge in prices but that has partially been offset by the increasingly dire forecasts for the economy which will naturally weigh on demand. The alliance will no doubt be pleased with oil trading back in the $90-100 range, the question is whether the US will. Or if another coordinated SPR release could be on the cards.

Gold on the rise

Gold is also edging higher and could build strongly on that if we get a weaker inflation reading. The yellow metal is seeing plenty of resistance to recovery rallies in recent days after falling back to earth with a bang last week. One inflation number may not change things as far as the Fed is concerned but for markets, it could be a big start. Especially following the FOMC minutes which contained a sprinkling of dovishness.

Bitcoin slipping again

Bitcoin is sliding, hitting its lowest level since late September despite other risk assets rallying in the run-up to the inflation data. While there have been occasions when it hasn’t perfectly aligned with other high-risk assets recently, today’s price action is interesting as it’s doing the complete opposite. That may change after the inflation data but going forward, it will be interesting to see whether the relationship between cryptos and risk assets holds or if we enter a new phase where quality traditional risk assets are favoured in an era of recessions and higher interest rates.