Rising inflation and energy prices will slow global economic growth

The US Federal Reserve and the ECB face very difficult challenges in balancing high inflation and slowing economic growth. The situation cannot be left as it is. Otherwise, inflation will continue to rise, which is already at highs. On the other hand, tighter monetary policy will slow economic growth, given that many countries have failed to reach the pre-pandemic levels and could go back into recession. Against this backdrop, European countries are more vulnerable than the US and UK.

At yesterday’s EU summit, the Hungarian Prime Minister said that the EU would not impose sanctions on oil and gas imports from Russia. But at the same time, the heads of the states and governments of the European Community have stated their determination to increase pressure on Russia and Belarus even more.

Asian stock indices are decreasing sharply in trading on Friday amid uncertainty over the situation in Ukraine and concerns about persistently high inflation. Japan’s Nikkei 225 (JP225) decreased by 2.05% from the open, Hong Kong’s Hang Seng (HK50) lost 1.61%, and Australia’s S&P/ASX 200 (AU200) fell by 0.94%. Reserve Bank of Australia Governor Lowe said that the RBA would prepare to raise interest rates this year amid an expected further inflation rise due to a jump in global commodity prices. Two weeks ago, the RBA did not plan to raise rates this year.

S&P 500 (F) (US500) 4,259.52 -18.36 (-0.43%)

Dow Jones (US30) 33,174.07 -112.18 (-0.34%)

DAX (DE40) 13,442.10 -405.83 (-2.93%)

FTSE 100 (UK100) 7,099.09 -91.63 (-1.27%)

USD Index 98.54 +0.57 (+0.58%)

News feed for: 2023.07.04

Australia RBA Lowe’s Speech at 00:15 (GMT+2);
UK GDP (m/m) at 09:00 (GMT+2);
UK Industrial Production (m/m) at 09:00 (GMT+2);
UK Manufacturing Production (m/m) at 09:00 (GMT+2);
German Consumer Price Index (m/m) at 09:00 (GMT+2);
Canada Unemployment Rate (m/m) at 15:30 (GMT+2);
US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+2).

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.