The volume of the market has shifted both in Europe and beyond the monitoring of inflation growth to the monitoring of economic growth. The influx of weak goods from Europe has definitively confirmed what many expected, the euro area is slowing sharply, and in the second quarter the performance of Japan’s economy also declined.
The week in the market was marked by public interest from the United States, the euro, the United Kingdom and Japan. From the reaction of the market to individual data, it is possible to figure out what the market is currently focused on, what is the center of interest. It’s not inflation, it’s growth.
Inflation in the USA climbed to a level of 5.6%, the highest level since January 1991. At first, this would certainly have been negative for the dollar a few weeks ago, given that the situation in the US economy is not going to be the same. However, the opposite was true, the dollar was able to hit profits from previous weeks and strengthened on the euro against the euro last week by about 1.5%, to 1.4715 USD / EUR. The reason was the simultaneous public economic growth of the euro area, which showed a decline of 0.2% compared to the first quarter, which was the first sign of a recession in the euro area since the introduction of the euro. In the US, the outlook for the US economy is better, with the dollar clearly gaining ground last week.
The pound is unpopular
Sending the dollar and at 6msn maximum stirred up the other currencies. The British pound lost against the dollar. The pound is a long combination of slowing economies, high inflation rates and high years of rates. Consumer inflation soared to 4.4% in the British Isles in July, outpacing the market. In the first place that the BoE meeting published last week, the bank is showing the fastest-growing scene for the British economy in the last decade, and financial markets have therefore begun to take on a series of annual rates. The pound lost 3% on the dollar and ended the week with around 1.85 USD / GBP. The pound lost 1.6% against the euro and traded at around 0.79 EUR / GBP during the day.
The Japanese economy is thus weakening
In addition, data released from Japan on Wednesday night showed that the Japanese economy contracted by an expected 0.6% in the second quarter, the worst result in seven years. In addition, the consumer yard in Japan has fallen at its lowest level since 1982, when the index was introduced. Although the negative results in this quarter were reassuring, the decline in Japan was eroded by doubts that the world’s second-largest economy could be unaffected by problems in other parts of the world.
Gold and oil prices have fallen. Agricultural commodities, on the other hand, are growing
Oil hit a drop from the previous five weeks and wrote off about $ 3, a week Brent oil ended around 111 USD / barrel, even though US oil and gasoline surprises surprised with a sharp drop. However, the market was initially convinced by declining world demand in line with declining economic growth. The deployment of the dollar helped the fall in the price of gold, which wrote off about 81 USD / ounce, which represented a decrease of 9.4%, to 780 USD / ounce.
The world stock markets were also characterized by high volatility for the week, with some indices ending the week with a slight loss or a small plus. The US stock index S&P closed on Monday at level on Monday, the Nasdaq gained 2.1%, the Dow Jones lost 0.5%. The British FTSE gained 0.3% during the whole week, while the DAX lost 1.4%. Japan’s Nikkei lost 2.0% last week.
The Czech economy has slowed sharply
Economic growth in the Czech Republic in the second quarter lagged behind the current market, when the economy grew by only 4.5% compared to the expected 4.8%. In addition, growth in the first quarter was revised from 5.3% to 5.1%. According to the Czech statistical series, the slowdown in economic growth was slower. Among the most important are a slight economic growth in the countries of major trading partners, a high level of base stocks, a sharp strengthening of the koruna against the dollar and the euro, which affected the company’s economy, the effect of slowing household growth on final consumption caused by high inflation.
The Czech koruna weakened sharply after the public growth, although in previous days it tended to wipe out losses from the previous week. The koruna weakened against the euro by about 0.6% last week, to 24.51 CZK / EUR, against the dollar by 2.2%, to 16.63 CZK / USD.
In Hungary, Poland and Slovakia, we managed to publish consumer inflation in July. In Hungary, inflation did not come as a surprise, remaining at the same level as in the previous month, at 6.7% on average. In Poland, we could not be surprised, when inflation rose by 4.8% from 4.6% in June. In Slovakia, the inflation rate rose to 4.8% from 4.6% in 2006, while the economy slowed to 7.6% in the second quarter from 8.7% in the first quarter. Like the Czech currency, the zloty and the forint (the Slovak koruna trades at the same level and flows only on the euro) tended to weaken last week. In Central Europe, there was a large profit, the forint lost 1.3% against the euro and is currently trading at 239 HUF / EUR, the zloty lost almost 2% and moved to around 3.33 PLN / EUR.
The stock exchanges in the region also lost ground, the specific stock market lost about 0.8% in the whole week during the afternoon, the Budapest stock exchange lost about 1.5% and the Warsaw stock exchange only about 0.5%.