- Worries about tightening gas supplies in Russia and weak economic outlook weighed on investors’ minds as European shares fell to its lowest in nearly a month; Eurozone business activities contracted along with consumers cutting spending; European equities see longest weekly outflow streak
- Comparing with the previous week, the EURO STOXX 50 Index was down 3.4% to 3,603.68 points, the DAX Index was down 4.2% to 12,971.47 points, and the SMI Index was down 1.9% at 10,942.16 points
- Russia announced a halt in natural gas supplies to Europe via Nord Stream 1 pipeline; This will further disrupt the economy of Germany which is highly dependent on Russian gas supply for this coming winter
- Global economy is increasingly at risk from sliding into recession as the Russia’s invasion on Ukraine and China’s strict Covid-19 lockdowns continues, affecting the supply lines that have yet to recovered from the pandemic; Germany consumer and business confidence hit new lows as household save up to pay for higher energy cost; Federal Reserve Chair Jerome Powell made a hawkish delivery on Friday that the U.S economy will require tight monetary policy to tame inflation, despite it coming with slower growth and weaker job markets, which will likely lead to households and business feeling the pain
- UK economy shrank record 11% in 2020, its worst since 1709 as it faces the burnt from the Covid-19 pandemic; Citi warns for UK inflation to top 18% in early 2023, more than nine times the BoE’s target, considering the latest jump in energy prices
- Global equity funds witness large outflows in five weeks on concerns that rate hikes will lead to recession; Equity funds suffered outflows of $51 billion, with a $2.6 billion outflow from European equity funds as the region get hit by an energy supply crunch
- In times of uncertainty, the Eurex Micro Product Suite remains an avenue for investors to take an opinion on the European markets as orderbook spread and depth remain attractive throughout the day; Nearly 5.7 million contracts have been traded (YTD), ensuring investors can continue to capture opportunities.
Learn more:https://www.eurex.com/ex-en/markets/idx/micro-product-suite
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