Oil prices fell by over 13% in a very volatile month for the commodity as the impact of prolonged business shutdowns and restriction on travel in China and neighbouring countries hit demand expectations. WTI closed the month at US$44.76 whilst Brent fell to US$50.52, both had begun the year trading above US$60.
As risk off sentiment spread through all asset classes gold continued its surge higher reaching US$1,659 on February 24, less than $100 from its all-time high of US$1,772 set in September 2012. During the month the safe-haven asset traded through a volatile range of $1,552 – $1,659 before settling around flat for the month at $1,585.69. Iron Ore and copper both had mixed months as demand issues, Chinese consumption, and potential supply disruption meant that both commodities traded through wide ranges. Iron ore declined by 7% early in the month before settling back for a 2.9% decline on the month.
The so-called fear gauge, the CBOE Volatility Index, surged to its highest level since the European debt crisis of 2011. Prior to this move the index had remained below the widely watched 20 level since August 2019 and began the month at just 18.
In currency, safe havens such as the US dollar and Japanese yen were the big winners while the Australian dollar and the British pound were the major losers during the month. The losses on the pound were widely seen as profit taking on what had been a strong gain for Sterling in recent months following the removal of the no deal Brexit threat in October and the landslide victory for the Conservative party in December. The Australian dollar hit its lowest level against the US dollar in over 10 years as it slid to $0.6515; fears of the economic impacts of the sever summer bushfire season and the slowing Chinese economy pushed the currency lower against most major currencies whilst traders also began to price in rate cuts from the RBA towards the end of the month.