As the U.S.
Federal Reserve’s (Fed) head Jerome Powell and Treasury Secretary Janet Yellen
are ready for two days of Congressional testimony, against a thrilling
background of another inflation spike in the American economy, the three major
New York stock indexes continue to consolidate tranquilly in the direct
neighbourhood of all-time highs. The U.S. consumer price index (CPI) set a
fresh record of 5.4% annual growth, with the so-called "core" CPI
excluding food and energy segments also hitting the 4.5% bar, which is an
absolute maximum of domestic price dynamics since 1991.
European central bank (ECB) made an unexpected move in its monetary policy by
changing its inflation target from the previous “below, but close to, 2% over
the medium term” to “2% over the medium-term with a ’symmetric’ aim”. The new
approach of the ECB is clearer as the Governing Council of the ECB is now
considering negative and positive deviations from this target due to the fact
that now they are equally undesirable.
this statement eliminates “any possible ambiguity and resolutely conveys that
2% is not a ceiling” as the President of the ECB Christine Lagarde said.
stocks opened generally lower today, with the Euro Stoxx 50 composite index
wasting 2.25% before midday. It slipped below the 4000 mark for the first time
since May. Current losses seem to be temporary opposed to the alleged overall
reasons for longer global markets' correction.
record close of the April-June quarter, the U.S. S&P 500 broad market index
ended trading on July 7 at a new all-time peak of 4,358 points. During the
previous two trading days, two small intraday corrections were also limited by
the bottom line of 4,315 points and quickly bought out.
Organisation of the Petroleum Exporting Countries (OPEC) and its allies failed
to reach an agreement to extend the production cut deal beyond April 2022. Three
days of dramatic dispute ended without an expected plan being reached
concerning the increase of production quotas by 400,000 barrels per day which
was predicted to be set for August-December 2021. The meeting of OPEC+
countries was postponed three times, but eventually ended with no agreement.
for crude oil is rising along with global economic recovery and reviving
The stocks of
the U.S. financial system grandees are on the rise again, after about a
three-week period of a corrective mood. On the night of June 28th to 29th, five
of the six largest American banks increased the amount of their quarterly
dividends, soon after the Federal Reserve System (Fed) gave permission for this
move. As a whole, the dividend sizes for these six financial institutions would
be increased by 40%. However, each financial institution has made its own
decision about the scale of the increase.
to be full of paradoxes and here is only one. Market participants managed to
have a breather from swift monetary policy position changes last week after the
Federal Reserve (Fed) announced possible earlier than expected interest rate
hikes in 2023 and the start of the stimulus tapering discussion. This
announcement was enough for a short correction of risky assets and the U.S.
were temporarily disturbed last week with a seemingly surprising projection for
the first potential rate hike "as soon as" the second half of 2023
instead of 2024 as mentioned in previous Federal Reserve’s (Fed) forecasts. On
the contrary, Jerome Powell, the U.S. Fed’s head, has mitigated some market
worries in a hearing before the House of Representatives panel on Tuesday, June
22. In fact, he performed just in a way, which market optimists expected from
the official first rank Fed's frontman.
prices were testing their highs this week at the psychological level of $75 per
barrel. The strong upward trend is still present despite recent corrections and
there could be many reasons for that. The pandemic is gradually fading, causing
business activity to recover worldwide, and consequently the demand for “black
gold” to increase.
to the recent forecast of the International Energy Agency the global demand for
crude oil could top 96.7 million barrels per day in 2021, which is 5.7 million bpd above the 2020 level, when it
plunged by 8.
pan-European composite Euro Stoxx 50 index showed its maximum value for the
last 13 years on Tuesday, June 15, exceeding the landmark of 4,150 points for
the first time since the spring of 2008. This record has not yet been
replicated in the course of today's European session, but the stocks are still
near record highs. Financial and industrial sectors, and oil companies are
among the leaders of today's upside move.
of market events on Thursday seem to largely illustrate a possible disposition
of the U.S. Dollar and the Euro. First of all inflation in the United States
presented a 13 year record high as it jumped to 5.0% vs the forecasted 4.7%,
and the previous April figure of 4.2%.
surge in prices may have been a shock for investors some time ago, and led to
immediate strengthening of the Greenback amid swift actions from the Federal
Reserve (Fed) to tighten monetary policy.