The energy crisis is getting worse in Europe. Investors await the FOMC meeting minutes :: InvestMacro

by just forex

Yesterday the dollar index showed an impressive rise and added nearly 1.4% on the day, setting a 20-year record. Analysts attribute this growth to the fact that the FOMC meeting minutes will be released today, which indicates that the Fed will raise interest rates again by 0.75% at its next meeting. Investors remain concerned about the stagnation caused by monetary tightening, despite the possibility of some US tariffs being lowered on Chinese goods. The looming energy crisis in Europe amid the Russian invasion of Ukraine and threats to corporate profits are also at the forefront of investor concerns.

With the stock market closed yesterday, the Dow Jones (US30) is down 0.42%, and the S&P 500 (US500) is up 0.16%. The Nasdaq Tech Index (US100) jumped 1.75% on Tuesday.

Stock markets in Europe were trading lower yesterday. The German DAX (DE30) is down 2.91%, the French CAC 40 (FR40) is down 2.68%, the Spanish IBEX 35 (ES35) is down 2.48%, and the British FTSE 100 (UK100) is down 2.86%.

Joachim Nagel, president of the Bundesbank, has criticized the European Central Bank’s plans to protect heavily indebted countries from higher borrowing rates. It has already hurt investor sentiment ahead of the European Central Bank’s interest rate meeting next week. The risk of Europe and Britain sliding into recession has risen sharply since a 17% jump in natural gas prices in Europe, which appears to cause more inflation.

In addition to the economic crisis, there is a political crisis brewing in Britain. Finance Minister Rishi Sunak resigned just minutes after the health minister resigned, saying he had lost faith in Johnson’s ability to govern in the national interest.

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Oil prices fell below $100 a barrel yesterday. Oil prices lost more than $10 a barrel in just one day. The dollar’s rally to a two-decade high on expectations of a Federal Reserve rate hike has spurred oil sales, which tend to attract less buying by non-US companies when the dollar appreciates. Mounting recession fears are weighing on the outlook for oil demand, despite concerns about supply constraints and the prospect of more US jobs coming in June.

Gold prices fell sharply yesterday. US Treasury yields jumped to 2.8% amid a rise in the dollar index. Gold and silver are inversely correlated with government bond yields and there is currently no fundamental support for gains.

Yesterday Asian markets closed higher. Japan’s Nikkei 225 (JP225) is up 1.03%, Hong Kong’s Hang Seng (HK50) is up 0.10%, and Australia’s S&P/ASX 200 (AU200) is up 0.25% on Tuesday.

Shanghai has started extensive COVID testing in nine districts after cases were discovered over the past two days, raising fears of a new lockdown.

S&P 500 (F) (US500) 3831.47 +6.14 (+0.16%)

Dow Jones (US 30) 30967.82 129.44 (−0.42%)

DAX (DE40) 12401.20 372.18 (2.91%)

FTSE 100 (UK100) 7,025.47 207.18 (2.86%)

US dollar index 106.49 +1.36 (+ 1.29%)

Important events for today:

  • – UK construction PMI (m / m) at 11:30 (GMT + 3);
  • – Eurozone retail sales (month / month) at 12:00 (GMT + 3);
  • – Economic forecast for the EU eurozone (month / month) at 12:00 (GMT + 3);
  • – FOMC member Williams speaking at 16:00 (GMT +3);
  • – UK ISM PMI (monthly) at 17:00 (GMT + 3);
  • – US JOLTs (m/m) at 17:00 (GMT+3);
  • – Minutes of the Federal Open Market Committee meeting at 21:00 (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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