Wednesday May 25, 2022

Stock markets are wiping out last week’s gains

The good mood from last week did not win the market. The world’s stock indices are falling, most of all the American ones. Oil is reaching new highs in response to low prices in America, weakening the dollar and raising estimates of future prices. The Slovak koruna and the Hungarian forint were still the most sought after in Central Europe.

This week, the market was particularly impressive, giving estimates of rising oil prices. Analysts from different parts of the world are wondering who makes the estimate. Low oil reserves in America, the weakening dollar and the influx of other speculators into high profits have pushed oil to new highs. So a barrel of light US oil to 135 dolarm and North Sea Brent oil to 133 dolarm per barrel.

From America, we have not been able to see significant macroeconomic goods this week, which would have significantly shaken the markets. The only thing that attracted the market was the announcement of the rise in industrial producer prices in April. The overall indicator surprised them with a slem, the core indicator, on the other hand, grew compared to the expected, two times more.

The US dollar weakened sharply during the week. After sending Monday and to $ 1,551 per euro, it weakened by more than two cents, reaching $ 1,579 per euro. The reason for the weakening dollar was mainly the good results from the German economy, which supported the euro against the dollar. It does not seem that the strong euro and the crisis in America will hit one of the largest economies in Europe. Industrial prices, which were published in the country, rose above April. The German IFO index, mc business climate, rose to 103.5 points in May from 102.4 points, a result so sharply above that of an analyst.

You can find a graph of the development of oil prices HERE.

The market sentiment was declining and the main risk aversion was growing. Again due to rising oil prices and this time also due to worsened insight into the development of the US economy. In its referendum from the last meeting, the Fed made a clear signal that the markets should not bother with further snow rates in the near future due to the threat of rising inflation. Well, rising global prices have become a dark one, while US economic growth has shifted to the background, mainly due to the recent plentiful growth in the US. This is not the problem in the American economy. The Fed dreamed the estimate for economic growth and assessed the situation in the housing market as not improving, while stating that there is a risk of a further decline in house prices, which would have a negative impact on the growth of the US economy. In a situation where there is no insight into the level of rates, this is really uncomfortable at first.

Stock markets reacted with a decline

Stock markets in Europe, Asia and the Americas have therefore reduced the gap with the recent good results of the US economy. Oil at new highs did not add to the desire to invest in action. European indices thus lose 1-3% compared to the previous week, London FTSE about 1.45%, Frankfurt DAX about 2.38%. Tokyo Nikkei lost 2.16% and New York S&P 500 lost 2.3%, Nasdaq 3.5% and Dow Jones 2.9%.

With the deteriorating mood in the markets, it is possible to observe again especially the interest in gold and other precious metals. The price of gold is kind of rising in the ad. This week, gold gained about 2.8%, when the price rose to 927.90 per troy ounce.

The Slovak koruna dl under speculated pressure to shift parity

This week, the Slovak koruna was still supported by a recent decision by the European Commission to recommend Slovakia’s accession to the euro area on 1 January 2009. Speculations about a shift in central parity are coming to an end. The central parity for which the Slovak koruna will be exchanged for the euro will be determined by the arrest of July, and until then it is still clear that the Slovak National Bank together with the European Central Bank will decide to shift the central parity of the SKK to the euro, which is currently at 35. .44 crowns per euro. The koruna fluctuates against the euro in the interval of +/- 15% from the central parity, which is in the range of 30.12−40.75 koruna per euro. At the moment, the exchange rate is at the level of 31.13 crowns per euro, which is very close to the lower limit of the fluctuating dog, and so the probability that the central parity will be shifted is high, as is the promise of further profits to Slovak crowns.

The Hungarian forint again followed the Slovak koruna this week, when it strengthened by about 2% against the euro. The forint is not limited to the maximum fluctuation dog in the ERMII system, which was removed at the end of the hole. And as the forint weakened from the beginning of the year, there was enough room on the EUR / HUF to fall, ie send the forint.

As for the Czech crown and the Polish zloty, these two men seem to be losing their breath. Although macroeconomic data published in Poland this week was stronger than analysts expected (wage growth, industrial production), it did not help the zloty. In the Czech Republic, the only published data were retail sales for running, which disappointed them, as well as other running data.

The stock market cracked relatively best this week. The PX index has so far lost only about 1.1%, while the Warsaw TIG 2.7% and the Budapest BUX 1.5%.

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