Monetary policy and the European energy crisis.

Monetary policy and the energy crisis Visitors: 1089 ★★★★★

Prices for large Western government bonds continue to fall for the fourth consecutive session. The ten-year BTP returns to the 91 euro zone with a yield of 1.909%, while the Bund falls to 97 euros with a yield of 0.266%. After the uncertainty of the Ukrainian conflict and the price environment, the European Central Bank decided to take a clear position, deciding to stop quantitative easing earlier than expected, with an immediate reaction from the bond market. As expected, the ECB left its key policy positions unchanged for the very short term (the deposit rate and the margin lending rate remain stable), but decided to decline more quickly and signaled the possibility of stopping bond purchases in the third quarter if the inflation forecast does not weaken. During the press conference, President Lagarde focused on the possible consequences of the crisis in Eastern Europe, saying that due to rising energy prices and supply problems, there will be bearish consequences for the European economy.; for this reason, it is now considered likely that inflation will remain high in the long term, since the surge in raw materials is accompanied by both purely energy inflation and broader inflation due to supply disruptions caused by the pandemic. Meanwhile, the price of crude oil has now increased by another 1.75%, while gold has returned to the $2000 per ounce zone from +0.70%. There is a lot of volatility in the foreign exchange market; after the release of inflation data in the United States (+7.9% year-on-year), the euro/dollar exchange rate falls and returns to 1.10.

Comments (0)

Investor pessimism is the worst since the 2008 crisis

According to BofA's monthly survey of fund managers, expectations of global growth and company profits have fallen to record lows. The liquidity level has reached its highest level in the last twenty years as investors have reduced their exposure to risky assets.

Monetary policy and the European energy crisis.

Ten-year BTP returns to the 91 euro zone with a yield of 1.909%, while Bud falls to 97 euros with a yield of 0.266%.

Orban: Ukraine is actually asking to block the Hungarian economy

In fact, Ukraine demands a complete shutdown of the Hungarian economy, Hungarian Prime Minister Viktor Orban said on Sunday, referring to the postulates on banning the import of Russian energy resources to the EU.

Inflation can lead to higher wages for all segments of the population

Representatives of the European Central Bank (ECB) are very concerned that the price increase may become a spiral that will also raise wages in the eurozone. The labor market is also facing further strengthening due to the military actions in Ukraine