Oil finds support, Gold crushed on global central bank tightening, Cryptos waver

• China’s oil demand stood at 14.6 million bpd, +17% y/y, but down from a month ago
• Strong dollar killing gold as more rate hikes penciled in by Fed
• Global crypto market barely holds onto the $1 trillion level, down 3.5% to $1.02T

Oil

Crude prices are trying to find support as the global growth outlook remains vulnerable to further shocks from aggressive rate hiking campaigns.  The Fed will keep the short-term outlook volatile as they are eyeing further rate hikes, while China rushes to deliver stimulus to aid their struggling post-COVID recovery. Today, the ECB signaled montetary policy is going to get a lot more restrictive. The news overnight was bearish for the crude demand outlook as New Zealand entered a technical recession, China’s industrial production and retail sales data declined as expected, and a robust Aussie jobs report inverted the yield curve for the first time since 2008. 

Oil might find some support as energy traders expect China’s recovery to only improve and as Wall Street doubts Fed Chair Powell will be able to deliver on his hawkish threats. 

Gold

Gold is getting picked on as investors brace for more central bank tightening and record highs for stocks. Non-interest bearing gold needs the global bond market selloff to ease up, before investors will test these waters. Gold is vulnerable to a plunge towards $1900 now that we are bracing for more tightening by both the Fed and ECB.  

Crypto

Crypto headlines remain mixed, which is not helping Bitcoin rebound from its recent lows. Another bankrupt crypto exchange in the spotlight, as Bittrex tries to allow withdrawals. BlackRock nears the filing of a Bitcoin ETF.

It is hard to get excited about cryptos when some of the favorite ones with what was believed to have attractive growth potential might be deemed securities. Until the regulatory environment is better, cryptos might struggle here.

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