Oil Prices Threaten to Wreak Havoc in Markets
- By Vasileios Gkionakis
- 5 min read
Summary
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- Oil prices are soaring, with Brent crude up nearly 30% this quarter. The supply side is driving the rise, increasing the risk of significant deterioration in global activity and upside to inflation.
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- Markets have reacted: equity prices are deeply in the red this month, while recent dollar betas to market factors show oil prices have jumped into the driver’s seat.
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- This unsettling development threatens already anaemic global activity. If it continues, it will likely lead to further risk reduction, dollar upside and high beta FX (alongside EUR) underperforming NOK and CAD.
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