Week So Far
We are in the middle of the week and let's cover the important moments that happened in the first 3 days in our blog.
1- UK Government Resigns
In the last 2 days 17 Officials have resigned from the UK Government and they say they have lost their confidence in Boris Johnson. These news are creating tough times for the UK Government and uncertainty in London Markets. We may see lower levels of the Pound in the coming weeks.
2 - Oil Prices Have Collapsed
On Tuesday Oil Prices have declined $10 in a few hours with recession fears. We see some limited rebound but it is not recovering completely. Investors are expecting a heavy recession in Europe first then in the other markets so the demand will go away. With these concerns bearish bets are getting more and more among investors.
3- EURO is testing 20 Year Lows
The Euro weakened below 1.02%, the lowest level in 20 years, and is on the verge of hitting dollar parity on growing concerns Russia may cut off gas supply to Europe and plunge the region into recession, which in turn would make it more difficult for the ECB to tighten monetary policy. The key pipeline Nord Stream 1 is set to shut for maintenance on July 11-21 and may not return to full capacity, threatening the bloc's objectives to fill 80% of storage capacity before winter.
4- Dollar Hits Fresh 2002-High
The dollar index extended gains to 107 on Wednesday, a fresh 20-year high, as rising prices, prospects of further interest rate increases and a deterioration in growth prospects weighed on investors' risk appetite. The Euro is under pressure as gas prices remain elevated and recession risks loom while the British pound fell amid political turmoil after two key ministers resigned. At the same time, divergent policies between the Fed and other major central banks including the ECB and the BoJ also pressured the dollar, as the Fed is seen more willing to tight monetary policy and raise the interest rates. Investors now await the FOMC minutes release later in the day for more clues on the size of the Fed's rate hike this month.
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