In the end, it is the story of the "watering can". Western sanctions against Russia are suffocating the world economy with no let-up on the battle front. 

The world sees a major economic crisis on its doorstep but can no longer turn back to stem it. On the contrary, investment and hedge funds are trying to get in on the action, attracted by the smell of volatility. 

In a few days, all the markets have literally collapsed, giving a little respite to the various states weaned on raw materials. Even oil, although announced at more than $300, has fallen back below $100 a barrel. 

But there is no hope that gas prices will follow the same path. On the contrary, Russia has understood the strength it could draw from a new scarcity of supplies, especially from Germany. 

Despite this decline, the fundamentals remain well oriented. Indeed, as bad things never happen alone, weather conditions on the various continents are sufficiently worrying to dampen the hopes of all those who would like to see the markets continue to fall. 

U.S. economic figures remain good and employment is strong. Despite inflation, Europe is not doing so badly. The main areas of uncertainty, however, cloud the future of the weaker countries. 

Although the recession seems unavoidable, it is difficult to say exactly what impact it will have on consumption, especially of textiles and therefore cotton. 

Demand has dried up, but there are still needs to be met and yarn prices, after having fallen, have stabilized at a reasonable and remunerative level. 

The CFTC's figures show that speculative funds are taking profits and that there is no return for the time being. But the most striking fact is once again the large number of contracts concluded in price fixing as well as the small number of fixings despite the fall in prices. The fear of finding ourselves with a new crop hanging on the price fixings is great. The liquidation of the July 22 should have been painful enough to prevent such a situation from recurring. Current levels, around the average price of the last ten years, and more than 40 USC/Lb below the highs, should begin to encourage some spinners to fix so as not to find themselves "taped" once again. 

We talked about it a few months ago, but now the Euro/Dollar parity is becoming a reality. Driven by a sick world economy and a rate differential largely in favour of the greenback, Europe is now expecting a strong reaction from the ECB, but not too strong given the debt of the European States contracted to face the COVID. The dosage will have to be skilful, the rise will have to be strong enough to fill part of the spread with the rates served on the dollar but not too important to avoid a recession of uncontrollable magnitude. 

We continue to believe that the 90 USC/Lb level is a low point for the December 2022 contract for the time being, which should return to around 105 USC/Lb in the coming weeks.