Attention turns to inflation data

Another disappointing day for stock markets with US indices ending the day flat after Europe posted decent losses.

There was always going to be some nervousness heading into today, with Fed Chair Jerome Powell, ECB President Christine Lagarde and BoE Governor Andrew Bailey all appearing on a panel at the ECB Forum. Under normal circumstances there would be potential for that to put investors a bit on edge so you can imagine what today had the potential to do. Which probably explains the very conservative approach by the above.

As is so often the case with events like these, there was a lot of attention in the build-up but the panel discussion itself was a bit of an anticlimax. Nothing we heard was new, there was no interesting fresh insight or hints at impending policy shifts that risked catching investors wrong footed. It was largely a rehash of past comments.

So while it didn't send investors into panic mode, it didn't do much to reassure them either. Central banks are clearly concerned about inflation and the economy but ultimately, the former takes precendence. I'm sure there'll be plenty more surprises in the weeks ahead, perhaps starting tomorrow when we get inflation, income and spending figures.

Oil reverses gains after inventory data

The rally in oil looked set to extend to the fourth day, as supply concerns outweigh recession fears ahead of the OPEC+ meeting tomorrow. The OPEC meeting today ended without any decisions being made amid speculation around Saudi Arabia and UAE's spare capacity.

I'm not sure it makes an enormous difference as neither were likely to save the day anyway or they would have already. And the group as a whole is failing miserably in its targets, running at 256% compliance and overall shortfall of more than half a billion barrels. I'm not sure what exactly we can hope for tomorrow that will make any difference. Although a formal acknowledgement that there's little more they can do could cause quite a stir.

Crude prices did flip midway through the US session following the EIA inventory data, with WTI and Brent now off more than 2% on the day, having been 2% higher earlier.

Will we see a gold breakout?

Gold continues to thrill no one as it whipsaws around $1,830 within a narrow range. Traders may have eyed the ECB Forum today with the hope that a comment from one or more of the central bank heads injects some life into the yellow metal and as it turns out, they've been left disappointed.

Which begs the question, how long do we have to wait now for a breakout in gold? It may not be an obvious source that proves to be the catalyst for such a move, of course, but there's still plenty ahead that could do it. There is an abundance of central bank speak and economic data left this week ​ – including inflation tomorrow – and with there being so much underlying anxiety in the market, anything could eventually set it off.

Surviving

Bitcoin has survived another day above $20,000 having traded briefly below it earlier on. It's getting very nervy in the crypto space and another significant break below here could bring fresh anxiety and more pain. It's still hard to create much of a bullish case for bitcoin beyond its admirable resilience but how long can that sustain it? The broader environment in financial markets certainly isn't helping.