Brent crude has edged up and is trading just below $109 dollars a barrel as the prospects loom of a European ban on Russian crude while work on a compromise to cater for Hungary’s demand for an exemption continues. Tensions have been pushed up after Russia slapped sanctions on European subsidiaries of state owned Gazprom. For now though a lid is being kept on the oil price by China’s zero-Covid policy and its city wide whack-a-mole approach of using mass lockdowns to quash infection spikes. With little end in sight to these tough restrictions, which have already caused a severe headache for manufacturers in terms of lost production, jitters are continuing about weaker growth and lower demand in the world’s second largest economy. Chinese stocks have been lifted over speculation that The People’s Bank of China will unleash a fresh round of stimulus to help companies keep borrowing costs lower amid worries about the economy losing steam.
Bitcoin Takes A Breather
For now the crypto wild west is taking a breather after reeling from the crash brought on by the collapse of a so called ‘stablecoin’, which demonstrated that it was anything but what it said on the tin. TerraUSD was designed to trade one on one against the dollar-but instead of being backed by the fiat currency – the reserve was made up of a mish-mash of other volatile coins. The clamour for regulation of stablecoins has become louder after losses mounted up but Bitcoin and Ether have regained some ground, with Bitcoin edging back up above $30,000. Some traders may see the sharp fall this month as an opportunity to buy the dip at a time but, given the hugely volatile nature of the coins, the crypto house of cards could tumble further. This latest plunge in the wheel of fortune demonstrates that speculating in cryptocurrencies is extremely high risk and are not suitable for investors who don’t have money they can afford to lose.’’
Article by Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown
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