Following reports of rising temperatures across the US and the expectations for increased demand we have seen a surge in natural gas prices before they pulled back slightly. In addition to these reports, declining production, rising liquefied natural gas (LNG) exports and the forecast that upcoming hot weather is expected to cause energy consumption in the state of Texas for air conditioning to hit an all-time record high are all contributing to this increase. Meanwhile, the global situation surrounding the commodity is unstable as a result of the ongoing Russia-Ukraine conflict which greatly impacted supplies and is continuing to cause uncertainty across markets and which has caused prices to hover around a 13 year high of $9.5. Despite this, some significant volatility remains a possibility on this market in the near future as this time of year is generally considered to be a period of inventory build ahead of the winter season, when gas demand reaches its highest point.

Bitcoin plunges over 7% and reaches key support area once again

A strong negative sentiment can be spotted across cryptocurrency markets with both Bitcoin and Ethereum dropping over 6% and dragging other coins with them despite starting the week trading higher following a period of consolidation. The main crypto currency is once again trading below $30,000 after managing to rebound from the $29,000 support area, which has managed to halt downward moves several times in the past and which has been a strong zone over the course of this extended consolidation period. While general market sentiment appears to be slightly improving today and despite the price rebounding once again, it is difficult to exclude the potential for another drop below this key support level as the overall geopolitical situation continues to be unstable and as investors seek a more risk-off approach. On the other hand, the range for a rebound could see the price rise over 6% and once again test the previous resistance area of $31,500 which has limited the potential for a significant upward move and the start of a new upward trend.

UK Services PMI paints negative picture

Today’s Composite services PMI report showed the weakest service sector performance since February 2021 as rising inflation hit customer demand and as input cost and prices drove inflation to new record highs. Furthermore, the negative economic climate has led growth projections to fall to the lowest since October 2020 while business activity expansion eased for the second consecutive month. While the main concerns continue to be rising costs and a decrease in buying power, potential action from the BoE and government may alleviate this pressure slightly but may be unable to significantly impact the situation in the long term.