Soaring Gas Prices Send DAX to Lows This Month

EEuropean markets have started the week on the right foot, as further increases in European gas prices to new records, keep the focus on the growing prospect of a European recession, as we head into the coming months. and winter.

Europe

German DAX bearing the brunt of losses today, with manufacturers getting hammered, with likes Mercedes, BMW and Porsche down sharply, while the FTSE100 is also lower, although the defensive part of the index is helping to mitigate losses, with healthcare, AstraZeneca up and utilities, as well as a weaker pound helping to compensate for some of the weakness.

Despite lower oil prices, travel and leisure are also being hit hard by IAG, easyJet and Wizz Air see heavy losses, on the basis that consumers will have less income to spend on vacations.

Vodafone the shares are lower despite the agreement to sell its Hungarian business to 4iG and Corvinus for 1.8 billion euros.

cineworld Shares fell again this morning after confirming speculation last week that it was considering a number of restructuring alternatives, including the prospect of filing for Chapter 11 bankruptcy in the United States.

WE

US markets took the lead in European markets opening sharply lower as natural gas prices rise on both sides of the Atlantic, with the Nasdaq 100 leading the losses.

The meme stock bubble is also imploding again with the movie channel AMC Entertainment shares fell sharply as its new APE preferred stock begins trading, and its industry peer Cineworld confirms it is considering possible Chapter 11 bankruptcy.

Bed bath and beyond also continues its slide of the past few days, with some of their suppliers starting to delay deliveries due to late bill payments, while GameStop is also significantly lower as investors’ attention shifts back to valuations.

Effects

The US Dollar continued its upward march, closing in on its July highs against a basket of currencies, with the Euro slipping back below parity and retesting last month’s lows of 0.9950 with a pause potentially targeting further losses. around 0.9620.

The pound also came under pressure, falling back below 1.1800 for the first time in over a month, with a move below 1.1760 potentially targeting a return to the 1.1500 zone.

Goods

Fears of recession and/or economic slowdown continued to weigh on crude oil prices, with prices falling sharply even as natural gas prices on both sides of the Atlantic continue to rise. Natural gas prices in the United States have reached 14-year highs while equivalent prices in Europe are hitting new records.

The strength of the US dollar is also tearing up metal prices with major drops in platinum and palladium prices. Gold also continued to slide, slipping to a four-week low.

Volatility

Shares of Just Eat Takeaway rose nearly 30% at one point in Friday’s trade on news that the company would divest itself of a Brazilian stake. The stock is still down nearly 60% year-to-date, but this update ahead of the weekend break saw daily volatility climb to 194% from 121% on the month.

Cryptocurrencies have also come back to life, with activity seen across the board here. Bitcoin fell on Friday, quashing hopes of a recovery in the offing, with fears of a global recession seen as a further decline in risk appetite. The legacy coin saw its daily volume rise to 73.72% from 51.59% for the month, while high levels of activity were seen elsewhere in the asset class. EOS also stood out for price action, posting a daily theft of 139% versus 83.57% for the month, although it managed to recoup some of its losses in weekend trading.

Lumber prices sold off strongly during the weekend break, with fears of recession again a likely driver. The underlying is still a little above recent lows for now, but the daily flight has pushed to 160% from 135% on the month.

Finally, a shock decision by the Turkish Central Bank to cut interest rates on Thursday despite inflation reaching 80% left the dollar-lira trade as the most active fiat currency pair. Daily volatility here rose to 10.18% versus 8.07% over the month.

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