The eurozone economy contracted for a second straight month, pegging the single currency to a 20-year low against the dollar on Tuesday, adding to the misfortune of pushing Europe into recession as higher gasoline prices. rice field.
Analysts said the S&P Flash Composite Purchasing Managers Index (PMI) of European business activity wasn’t as bad as had been feared, but given gas prices soared to record highs heading into the winter. said it is likely that more grim news for the economy will follow.
The Stoxx index of European corporate stocks fell 0.4% on Tuesday, falling for almost a week. It is now down about 11% from its all-time high on Jan. 4 as the war in Ukraine pushed up inflation, triggering higher central bank rates and clouding growth.
Benchmark gas prices in the European Union are 14 times higher than the last 10-year average, doubling in just one month and surging 13% overnight to a record peak.
Europe could prepare for a new disruption of its energy supply from Russia.
“I don’t think the war in Ukraine will end anytime soon. It will be a catalyst for the market to rise. It will continue to put pressure on energy prices and when it comes to the euro, the only way out is for it to fall,” Michael said. Told. Hewson is the chief of CMC Markets and his market.
Monica Defend, head of the Amundi Institute, an asset management advisory group, said the euro, which currently trades at $0.9920 against the dollar, is expected to drop by December as the outlook for Europe deteriorates. It is expected to drop further to $0.9600.
“The US and the eurozone are on two different trajectories,” she said.