Summary of the Impacts of Releases
22 August 2022 – 02 September 2022
Impact of Economic Releases:
The major economic releases of this week include the CPI figures from United Kingdom, PPI figures from Germany, and GDP figures from Eurozone.
Europe
- Europe showed mixed signs on its economic outlook this week; Shares have plunged from last week, with natural gas supply jeopardized again, The Euro dropped below U.S. dollar, while economic indicators of some European countries partly eased inflationary concerns
- On Monday (22 Aug), the Euro dropped to 0.9928 against U.S. dollar – below the record low of 0.9952 during July; Analysts at Morgan Stanley claimed that the currency will fall to 0.97 this quarter, backing up with Fed’s continuous rate hike movement and disturbance in manufacturing activities due to gas shortages and climate changes
- Russia announced another unexpected maintenance schedule for Nord Stream 1 pipeline; This will further disrupt the economy of Germany which highly depends on Russian gas supply for this coming winter will be scarce
- On the other hand, Germany posted its second quarter GDP on Thursday (25 Aug) with unexpected growth; Its economy grew 0.1% QoQ, which is higher than surveyed figure of 0.0%; Household expenditure grew by 0.8% and government spending grew by 2.3%
- Despite its historical two-digit inflation, UK consumers reported surprise sales increase; The retail sales balance for August surge to +37 from July’s -4, way higher than its expected figure of -7; This jump in consumption was a result of welfare spending from former finance minister who aimed to alleviate living-cost pressure
- European shares recovered from straight 3 days of loss on Thursday (25 Aug) as oil and tech stocks gained; Energy shares climbed 1.2% as crude oil prices increased by supply concerns; Technology stocks were boosted by growth stocks in Wall Street.
U.S.
- After last week’s recovery, the U.S market faced some slumps as investors were shaken by the Fed’s minutes; The looming recession has been causing the market to be highly volatile
- Global markets saw a decline in the last few days as investors anticipates for Powell’s speech as he gives a sensing of the future market sentiments
- U.S President Joe Biden announced that the government will forgive $10,000 in student loans for million of students in college debts, the cost of the debt forgiveness has been estimated to be $321 billion which has led to many areas of concern; Some attribute this act to be inflationary while some also thought that this would be disinflationary as consumers are freed from some debt
- With inflation and recession looming over most economy, the Fed is also still in the midst of increasing their interest rates; In the coming September meeting, the Fed is expected to increase interest rates up to 75 basis points; This is on top of a cumulative 225 basis points of hikes since March.
All timings here are based on SGT/HKT time zone
Learn more: https://www.eurex.com/ex-en/
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