Energy Fever Breaks

The monumental move in European gas and energy prices ratcheted up to a new level on Wednesday, rocketing 40% higher at one point. However, the move reversed and prices finished 10% lower, in part due to comments from Putin suggesting Russia could add incremental supply.
It's far too early to call a top for certain, but the spike higher and reversal has all the technical elements of a blow off following a parabolic move. A cold winter could ultimately leave parts of Europe in a dire situation but that's undoubtedly priced in already. There's also a fair chance that hedges or a short squeeze added to the move.
Gas prices in Europe and North America, along with oil, all carved out bearish outside days and that rippled through broader markets, leading to a recovery in European equities. German stocks in particular may be a clear beneficiary if energy prices stabilize or decline.
Tail risks also fell in the US as Congressional leaders signaled a short-term truce on the debt ceiling, pushing the deadline to December. That will give Democrats time to add it to a reconciliation bill or we'll do this dance again in two months. In any case, markets breathed a sigh of relief from another manufactured crisis.
Ultimately, it will be the economy that decides were markets go. The ADP employment report has been a poor jobs tracker but it foreshadowed weak non-farm payrolls in August. Wednesday's report showed 568K jobs compared to 428K expected.Latest IMTs
-
Copper Broke, Time to Worry?
by Ashraf Laidi | Sep 28, 2023 12:22
-
Inflection points in Gold إنعطافات الذهب
by Ashraf Laidi | Sep 22, 2023 18:25
-
GBP Does it again عملها مرة أخرى
by Ashraf Laidi | Sep 20, 2023 13:19
-
ندوة أوربكس الآن مع أشرف العايدي
by Ashraf Laidi | Sep 19, 2023 18:43
-
Gold & CPI Scenarios الذهب والسيناريوهات
by Ashraf Laidi | Sep 15, 2023 12:11