London: The euro and sterling retreated against the dollar on Thursday as economic data showed the outlook for an increase in the European recession. Global stock markets have been hit and recovered this week, but oil prices have widened losses.
Economic growth in the euro area plummeted in June, according to key research. This is because high prices have provided a strong recovery from the severe downturn in the coronavirus pandemic. The monthly purchasing manager index, which S & P Global is paying attention to, plummeted from 54.8 in May to 51.9. Numbers above 50 indicate growth.
PMI data also revealed that UK private sector business activity has been sluggish at the lowest levels for decades-high inflation. The survey focuses on major European currencies, and the foreign exchange market is seen as a clearer indicator of a country’s economic health compared to the stock market, which is characterized by many multinationals. ..
“The global economy continues to suffer from severe supply shocks that boost inflation and depress growth,” said Nathan Sheets, an analyst at Citi, adding that the chances of a recession have reached 50 percent. rice field. Commentators have warned that the global economy may be shrinking due to the sharp rise in global interest rates aimed at cooling inflation.
Federal Reserve Governor Jerome Powell said Wednesday that a short-term recession was “certainly possible.” “Inflation has clearly been surprised upwards over the past year, and more surprises may await,” he said.
This month the Fed raised US interest rates by 75 basis points and is expected to do the same in July, with some observers predicting two more such moves thereafter. Deutsche Bank CEO Christian Sewing also said it could shrink by 50% next year.
Elon Musk, JP Morgan boss Jamie Dimon, economist Nuriel Rubini and others make similar predictions. The outlook for a global economic recession continued to lower oil prices as traders suffered from slowing demand.
Brent and WTI have been sluggish in the past week, despite sanctions on Russia’s oil exports and a gradual resumption from China’s blockade. In addition to Wednesday’s oil sales, there was data showing a surge in US stockpiles. “The slowdown in global growth is a risk to oil demand and may help ease market tightness,” said Warren Patterson of ING Group. “Already, the forecast has been revised lower.” – AFP