Commodity prices are dropping sharply due to recession fears. Cliffs oil, wheat and copper

Fears of recession especially and even some. The truth is that the prices of many commodities have started to fall providing some positive signs, at least with regard to fight inflation. Oil fell below $100 a barrel today (Quality Brent, which is crude oil extracted from the North Sea that is a reference for European trade), something that has not happened since last April. in the last month barrel lost 16% of its worth. This decline was partially mitigated by the weakness of the euro (oil is paid for in dollars), but it is still significant. It also encourages descent food prices with the wheat It is being traded today About 30% less Compared to two weeks ago. One also affects the grains market stability After the violent upheavals caused by the war, as well Possible deal prospects To resume exports from Ukraine. The copperThe metal, more sensitive to economic performance, lost a quarter of its value in two weeks. Push-ups similar to aluminum and zinc. Steel prices are on the slope.

Recession fears have also redirected speculative positions hedge fund They downloaded derivatives aiming at higher prices to adopt an opposite strategy. Movements that are the result and not the cause of the price decline but that it amplifies it. It is difficult to say if and for how long this trend will continue, especially if we take into account rising geopolitical uncertainty. A few days ago, the US bank Citi went so far as to assume a Oil is below $65 by the end of the year. there Federal Reserve However, he made it known that “inflation risks in the US could hold”. From these results, it appears that the central bank’s strategies are beginning to bear fruit. high interest rates drains money of the economic system and make investments and loans more expensive. This causes a economic slowdown Hence downward pressure on prices. They are the first to be affected industrial prices, In the second moment also those destined for consumption and therefore inflation.

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