Bitcoin crash, Ukraine war fears, talks with Iran
By Geoffrey Smith
Investing.com – and other cryptocurrencies drive risk assets lower as Ukraine war concerns trigger a broad sell-off. This is preventing US futures from bouncing back despite last week’s heavy selling. Oil drops slightly as Iran says it is closing in on a deal to lift US sanctions, while Unilever (NYSE:) shares soar on reports that the plague of Procter & Gamble (NYSE:), Nelson Peltz, took a stake. Here’s what you need to know in financial markets on Monday, January 24.
1. Bitcoin now down 50% against ATH
Cryptocurrencies continued to sell off, extending a self-perpetuating spiral of sell-offs and loss of technical momentum.
The world’s largest cryptocurrency fell another 6.7% to $33,569 as of 0555 ET (1055 GMT) and is now down more than 50% from the all-time high. which she had achieved only two months ago. Analysis by Korean site CryptoQuant suggests that more than 38% of all Bitcoin ever mined is now trading at a loss, down from a peak ratio of 34% during the previous sell-off in the middle of last year.
These developments come as the trend of rising interest rates puts sustained pressure on risky assets and leveraged portfolios around the world. More concretely, this follows fresh evidence of global central banks’ crackdown on private digital currencies after the Russian Central Bank proposed an outright ban on cryptocurrency mining and usage. .
2. Ukraine fears trigger a sell-off
The situation at the Russian-Ukrainian border also continues to penalize risky assets. Both the United States and the United Kingdom have asked the families of their diplomats living in Ukraine to leave the country, suggesting that the two countries still see a high short-term risk of a Russian invasion.
The New York Times and others have reported that President Joe Biden is considering sending up to 50,000 combat troops to Ukraine, while the UK – whose government this weekend warned of Russian intentions to to install a puppet government in the country after the invasion – reportedly sent some 2,000 anti-tank launcher systems to Ukraine.
Russia dismissed the UK’s claims as baseless. On Friday, Russian Foreign Minister Sergei Lavrov said the country had no intention of sending troops to Ukraine. Russian assets nonetheless came under heavy pressure on Monday as a Kremlin spokesman warned there was an extremely high risk that Kyiv would launch military action against two Russian-backed dissident small states in the Eastern Ukraine: the dollar, while the benchmark stock index fell 9.4%, also to a 14-month low. European stock markets fell about 1%.
3. Stocks should prolong losses; Peltz lights a fire under Unilever
US stock markets are expected to open lower as risk aversion worsens in light of developments in Eastern Europe.
As of 6:15 a.m. ET, early gains had reversed to flat, though they were off their overnight lows. were still down 0.1%, however, and were down 0.2%. The market looked set for a rebound from oversold territory after its worst week in months. The Dow lost 4.6% last week, while the Dow lost 5.7% and the Dow lost 7.6%.
Stocks likely to be targeted later include Unilever, after news broke that activist investor Nelson Peltz has taken an unspecified stake in the company. Peltz had led a partially successful campaign for change at his American counterpart Procter & Gamble in recent years.
Earnings week starts relatively quietly with updates from Halliburton (NYSE:) released early and from IBM (NYSE:) after the close.
4. Omicron hits European services in January; Italy start pushing Draghi upstairs
The eurozone economy stuttered in January as the wave of the Omicron variant of Covid-19 disrupted the services sector in the region’s two largest economies.
The IHS Markit index for the region fell more than expected to 52.4, according to a preliminary reading, largely due to a slump in the . However, manufacturing in and performed better than expected amid signs that supply chain bottlenecks may be easing.
The Deutsche Bundesbank, however, warned in its monthly report that the German economy likely contracted in the fourth quarter.
Elsewhere in the euro zone, Italy begins its formal process of appointing a new president on Monday. Evidence so far suggests that former ECB President Mario Draghi will move upstairs to the prime minister’s office, allowing normal Italian politics to resume. Former Prime Minister Silvio Berlusconi withdrew his candidacy over the weekend, leaving no clear alternative to Draghi.
5. Oil falls on Iran, news from Abu Dhabi
Oil prices weakened after Iranian negotiators said they were closer to an agreement on the removal of U.S. sanctions, removing an artificial constraint on global supply.
Reports suggest that this constraint has in any case weakened considerably over the past year, due to various maneuvers by Chinese buyers to circumvent the current measures.
In addition, the United Arab Emirates reported shooting down more long-range missiles targeting the city of Abu Dhabi by Iran-backed rebels in Yemen, allaying fears of further disruptions to exports from one country. of OPEC’s most reliable suppliers.
As of 6:30 a.m. ET, futures were down 0.4% at $84.77 a barrel, while down 0.4% at $86.75 a barrel.