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Turner's Take Ag Marketing | European Lockdown Fears Rile Markets

By: Craig Turner, Senior Risk Management Consultant

European Lockdown Fears Rile Markets
 
Craig Turner
Senior Risk Management Consultant
craig.turner@stonex.com
 
 

European Lockdowns Fears Rile Markets

Austria announced they will reimpose a full lockdown today. On Monday the lockdown was just for the unvaccinated. As infection rates climbed this week they announced today there intentions for a full lockdown.  There is concerns this morning that Germany may soon follow suit. European stocks are lower by 1% but the energy markets seem to be taking it the worst this morning.  Crude, Heating Oil, and RBOB gasoline are all down 3% to 4%. Natural has been trading a few cents from unchanged.

This has the potential to cause a lot of volatility in the markets today and next week. Next week is Thanksgiving week so US volume and trader participation will be lower while European shutdown news will intensify.  The US is closed next Thursday.  Friday is a half day and usually one of the lowest volume days of the year.  There is no reason to get over your skis right now in the markets so I would not be too heavy as Western Europe figures out how they will deal with COVID when infection rates seasonally increase.

The silver lining is everyone now knows what limited and full shutdowns look like. The market has seen how demand comes down and then bounces back.  There is less uncertainty around these events as there was the first time around.  That doesn't mean we can't see the markets sell off some more but I also don't think commodities will crash either.  For the some this break could be a buying opportunity on the consumer side of the commodity business and bullish speculators.

 

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