July 1, 2022

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This tear on the gold.  The specter of recession looms over the stock market and hits the Polish currency

This tear on the gold. The specter of recession looms over the stock market and hits the Polish currency

From Friday to Tuesday golden He was making up for the losses of the previous days. But on Wednesday, the whole process turned around and the profits of the past few days fell almost to zero. dollar In the morning it cost about 4.39 PLN. After 12.00, a big sale began and you had to pay up to 4.47 PLN for it. Then our currency strengthened slightly and settled at the level of 4.45 PLN. The situation with the euro was similar – from PLN 4.64 in the morning to PLN 4.69 in the afternoon. also grows fairy and the franc, worth 5.46 zlotys and 4.63 zlotys, respectively.

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The zloty loses due to the specter of recession

Where did these sudden drops come from? Among the concerns are Fed Chairman Jerome Powell’s speech to the US Congress, the ECB meeting (no decision i.e. no price movements), and the Swiss National Bank (SNB) to present a quarterly report on its monetary policy. All of this is taking place in the context of an increasingly dangerous recession spectrum.

“New Federal Reserve research shows increased risk of a recession: There is a 50% chance of a significant increase in unemployment in the next four quarters. A separate model shows a 67% probability of a significant increase in unemployment in the next two years. Stock markets give the impression that these darkening scenarios Not fully pricing” – notes Jacek Rzezniczek, analyst at Stooq.pl.

Jakob Rybacki of the Polish Economic Institute draws attention to the Fed’s models, which show that over the next two years “it will be weak with growth Gross domestic productAccording to the expert, this is a “signal of a major depression.”

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“What’s going on with feetIt is now the main topic of market investors. They wonder whether they should worry about central banks hitting interest rates so hard that it leads to a recession. The opposite situation, that is, very little reaction inflationcan make it increase the prices stifle the economy” – Maria Mazurek, journalist for Gazeta.pl, notes this. The Federal Reserve has already entered a rate-raising cycle, and the Swiss National Bank (SNB) and Bank of England have also made an upward move. In addition, the European Central Bank announced that it will take such a step as well at its next meeting in July.

As Bankier.pl wrote, Such measures mean strengthening local currencies and weakening emerging market currencies such as Poland. The Czech Central Bank will decide interest rates on Wednesday. If it raises it by 100-125 basis points, it will force another increase in Poland – by at least 100 basis points.

Recession will hit economies

Investors fear a recession as the markets are clearly showing. From the beginning of June, the major stock indices, including. S&P500 American or European markets. It’s no different in Warsaw, either. However, the biggest sell-off was on crude oil, which is the main inflation factor – it even lost more than 6% on Wednesday..

Here, however, in addition to the fear of stagnation, movement plays an important role Joe Biden. President of the United States He previously said on Monday that he was considering an intervention fuel market. And according to what was reported by Reuters, that will be announced on Wednesday at 20:00 Poland time.

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The president also, orally and in writing, has some sort of quarrel with the fuel companies. He criticized them in his speeches, asserting that they are recording record profits at a time when consumers are paying record prices to refuel at stations. He even wrote them a letter last week.

A meeting is scheduled for Thursday, June 23, between the President of the Republic and representatives of the seven largest oil companies in the world United States of America.

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