Summary of the Impacts of Releases
05 September 2022 – 16 September 2022
Impact of Economic Releases:
The major economic releases of this week include the GDP in Eurozone,deposit rate and refinancing rate in Eurozone.
Europe:
- The ECB raised 75 basis points on Thursday (08 Sep), lifting the bank’s benchmark deposit rate from zero to 0.75%; This is the second continuous rate hike from the central bank amidst of possible stagflation driven from aggressive rise in price level and recessionary concern due to energy shortage
- This decision also came out at a time of weakening Euro, hitting 20 year-low against dollar; The Euro slightly jumped after the rate hike was released but slipped during Lagarde’s press conference
- New PM of U.K. Liz Truss announced a 100-billion-pound energy price cap plan after ECB’s rate hike decision; Britain’s soaring energy prices further worsened the country’s inflation, and this new legislation would ease the household financial burden; Consequently, British 10-year government bond yields rose to their highest since 2011
- The price cap on Russian Oil received a hostile response from Moscow; The Kremlin warned that it would retaliate over G7’s proposal on price restriction and ship more of their oil supply to Asia; Nord Stream pipeline is still under provisional maintenance, arousing more concerns on Energy supply
- European equity funds show the biggest fund outflow as geopolitical and economic risks have sustained since the beginning of the year; According to Refinitiv Lipper data, European equity funds have witnessed outflows worth $31.2 billion in the first eight months of this year
- Queen Elizabeth II passed away at the age of 96 on Friday (09 Sep); This comes at the time of Britain’s deepening economic forecast; The London Stock Exchange remains open, but will close on the day of ceremony
US:
- September starts off as a good month for the U.S markets as stocks rallied on Thursday (08 Sep) – the Dow Jones rose by 0.61%, the S&P 500 by 0.66% and the Nasdaq by 0.6%; The rally was boosted by financial institutions and healthcare companies, with the confidence that the Feds are intending to raise the interest rates again
- Worries and focus are now on the U.S railroad industry as workers going on strikes can potentially cost the U.S economy $2 billion per day in output; On top of supply chain issues due to the war and COVID-19, the strike can be detrimental to the economy
- The impending deadline of 16 Sep puts pressure on U.S. President Joe Biden if he wants to avert a strike, the deal consists of having a wage increase of 14.1% effective immediately and a 24% compounded wage increase spread across the five-year period
- Meanwhile, U.S. manufacturing sector has been growing steadily as employment and sales data rebounded after expectations that inflation has likely peaked; U.S Initial Jobless Claims reported lower at 222k instead of 235k (Actual vs Surveyed); Despite positive economic data, the Fed remains hawkish in raising interest rates to bring inflation down.
All timings here are based on SGT/HKT time zone
Learn more:https://www.eurex.com/ex-en/
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