Friday May 20, 2022

Actions for opt rst. But the skeleton in the box is still full

A week passed on the financial markets brought after a long time back. Both stocks and other risky investments and financial assets prospered. Thanks to this, for example, the Czech koruna could strengthen on both the dollar and the euro.

A flash of optimism in the markets, but to the extent known to the fact that the latest economic data still testify to the known risks of a slowdown in the world economy again. Moreover, concerns about the still very high situation in the euro area cannot be removed from the minds of traders.

Pekvapiv propad spotebitelskch vr

Last week, he brought several patches to the markets at first. One of the most surprising was the unexpected drop in consumer prices in the US, which fell by $ 9 billion in May, just a small pot, which was a jump of $ 15 billion in April.

The still high unemployment and the growing number of people without a claim to work in unemployment, so the household is forced to breed, to which the American economy was not accustomed in the past. They do not resort to further debt to resort to old debts.

In addition, this trend has accelerated in the last two months, which may have an adverse effect on consumer demand. This is not only the engine of GDP growth in the United States, but also one of the main sources of growth in European countries, which has so far been weakened by the euro and growing foreign demand.

The reaction of the market is unexpected, growth continues

I could go in surprise, not the data itself, but in the end the market reaction. They completely ignored the results and continued to grow with intense driving.

Evidence that in the worlds of the economy something is not in the horseshoe, but from other sides. For example, the Baltic Dry Index (BDI), which is very popular among investors, has not seen a decline in its share, and last week it reached the lowest level since May 2009.

What does this index map? BDI is an indicator of transport costs in shipping and thus a strong indicator of the demand for world commodities such as oil, coal, or iron. The declining value of the index is the result of lower transport prices and therefore lower demand for these raw materials. In June alone, the index fell 41 percent, which goes hand in hand with a significant drop in new orders in the US.

Again, the tests drank the oil into the fire

In addition to the concerns about the state of the world economy, there are endless doubts about the health of European banks. These were intended to dispel these stress tests performed by the Banking Supervision Board (CEBS).

The tests are intended to model the effects of a further deepening of the debt crisis in the euro area on the state of European banks and to provide recommendations for a possible addition to their capital. The European Commission recently decided to declassify them in order to allay the fears of investors who will find out their result on July 23.

As the bag turned out last week, these tests will be particularly benevolent. The worst case scenario is not at all with the bankruptcy of the days from the eurozone countries, and the maximum depreciation on Czech and Spanish bonds is set at only 17 and three percent, which, according to some analysts, is barely their current market price.

This raised the suspicion that if CEBS applied the actual hard tests – as was the case in the USA, for example – their result would be so obvious that it would, on the contrary, cause traders to panic.

The coming week will again bring some very important indicators, such as US retail sales or consumer yard indices. In addition, the rates will be decided by the US central bank, which will probably not be hit by optimism. If these events gave a negative at first, the optimism of the last few days can be taken very quickly again.

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