Global stock markets are under pressure again. The euro has reached parity with the dollar :: InvestMacro

by just forex

US stock indexes fell on Monday as investors anticipated a weak reporting season and negative inflation data for June. Despite the strength of the labor market, investors remain wary of a recession and are waiting to hear company executives about costs and supply chains and their views on business conditions over the next few months. “There is concern about earnings season and the CPI report, but I think the market has an idea of ​​what the CPI will bring this week,” said Robert Pavlik, senior portfolio manager at Dakota Wealth.

With the stock market closed on Monday, the Dow Jones (US30) was down 0.52% and the S&P 500 (US500) lost 1.15%. The Nasdaq Technology Index (US100) fell yesterday by 2.26%. At the end of the day, all three indicators were on the positive side.

US consumers see inflation continuing to rise next year, but expect a more moderate pace in the long run, indicating that inflation expectations remain reasonably resilient, a New York Federal Reserve survey showed on Monday. The Federal Reserve is expected to raise interest rates by 75 basis points at its July 26-27 meeting. Fed futures traders expect the benchmark rate to rise to 3.50% by March.

Twitter Inc shares fell nearly 10% Monday as the company prepared to sue Elon Musk for trying to turn down a $44 billion private offer.

Most stock markets in Europe fell on Monday. Germany’s DAX (DE30) is down 1.40%, France’s CAC 40 (FR 40) loses 0.61%, Spain’s IBEX 35 (ES35) is down 0.43%, and only Britain’s FTSE 100 (UK100) closed yesterday with more than 0.01%.

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The euro fell to a 20-year low and is close to parity with the dollar. One of the main problems the European Central Bank is dealing with at the moment is the so-called “fragmentation” problem. It happens when the bond yields of the northern European countries fall, and the yields of the peripheral countries increase. The concern is that monetary tightening will increase this divergence, leading to an unequal financial position in the public market. This split of views could lead to a stronger market reaction to the ECB’s actions. Recently, Austrian MPC member Holtzmann called on the European Central Bank to raise the interest rate by 125 points over the next two meetings: 30 points in July and 75 points in September.

The largest pipeline, Nord Stream 1, which brings Russian gas to Germany, began annual maintenance on Monday, and supplies are expected to be suspended for ten days.

In the oil market, the situation remains uncertain. On the other hand, supply shortages on the back of higher summer demand pushed oil prices higher. On the other hand, the Fed is raising interest rates significantly, which leads to an increase in the dollar index. Dollar-denominated commodities, including oil, are not usually required of foreign buyers when the US currency is rising. As a result, oil prices are very volatile at the moment.

Yesterday, Asian markets were mostly lower. Japan’s Nikkei 225 (JP225) is up 1.11%, Hong Kong’s Hang Seng (HK50) is down 2.77%, and Australia’s S&P/ASX 200 (AU200) ended the day 1.14% lower. Asian stocks are also under pressure due to the prospect of further monetary tightening by central banks and the renewed COVID-19 outbreak in China.

Sri Lanka’s parliament speaker said on Monday that parliament will elect a new speaker on July 20. During the meeting of party leaders, it is necessary to ensure that a new government of all parties is formed in accordance with the constitution.

S&P 500 (F) (US500) 3,854.47 −44.91 (−1.15%)

Dow Jones (US 30) 31175.52 162.63 (−0.52%)

DAX (DE40) 12,832.44 −182.79 (−1.40%)

FTSE 100 (UK100) 7196.59 +0.35 (+0.01%)

US dollar index 108.25 +1.24 (+16%)

Important events for today:

  • – Japan Producer Price Index (month / month) at 02:50 (GMT + 3);
  • – German ZEW Economic Index (m / m) at 12:00 (GMT +3);
  • – Eurozone ZEW Economic sentiment (month / month) at 12:00 (GMT + 3);
  • The economic outlook for the eurozone in the European Union, provisional.
  • – Bank of England Governor speaking at 20:00 (GMT +3).

by just forex

This article reflects a personal opinion and should not be construed as investment advice and/or a continuing offer and/or solicitation to carry out financial transactions and/or guarantee and/or anticipation of future events.

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