Clouds are gathering again

The equity market rally has continued in the US, but has already started to stall in Europe. The first reason is that the rebound was very strong (over 10% for the Eurostoxx 50, 6% for the S&P 500). The second reason is that optimism about the peace talks in Ukraine has diminished significantly after Russian diplomacy simply called rumours of progress in the negotiations “false”. Finally, the oil price rose sharply yesterday, recording a gain of $10/b, which put the focus back on rising inflation and tightening monetary policies.

In this regard, the Bank of England as expected raised its base rate from 0.5% to 0.75% yesterday, following the Fed’s first rate hike since 2018. The OECD validated the tightening of monetary policies and called on governments to use the fiscal tool to cushion the shock of higher commodity prices for consumers. The OECD estimates that the war could lower global growth by more than one percentage point and raise inflation by 2.5 percentage points in 2022. More details here.

Energyscan economics news

The economic calendar is relatively empty today. The euro has continued to rise against the US dollar but now appears to be plateauing around 1.11.

Share this news :

You might also read :

May 14, 2021

Crude crash

Crude oil prices scaled back to 66.9 $/b, amid the resolution of the US colonial pipeline issue on Thursday and selling pressure coming from CTA…
Join EnergyScan

Get more analysis and data with our Premium subscription

Ask for a free trial here

Don’t have an account yet?