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Europe is currently experiencing record high temperatures and dryness,In northern Italy, the water level of Po, the country’s largest river, is the lowest in 70 years. There are concerns about the impact on grain and hydropower.Under these circumstancesLast week, the French nuclear power plant was able to generate less than half of its full capacity, according to Bloomberg estimates. The background is the lengthening of the maintenance period due to aging. With Russia’s invasion of Ukraine, the energy supply and demand has become tight, and the future is uncertain. Below are five news items to keep in mind as you start your day.
Significant rate hike suggestion
The Bank of England (British Central Bank) said it needed to raise interest rates more aggressively to stop the pound’s depreciation, which boosts inflation.A member of the Mann Monetary Policy Committee (MPC) insisted. According to the manuscript of the lecture, the upward pressure on domestic prices is likely to be stronger than previously expected. He cited the government’s economic support measures, strong employment, large bonus payments, the strong housing market, and the accumulated savings of consumers. On the other hand, he also suggested that rate cuts may be necessary after the current tightening cycle.
25bp and Mr. Lagarde in July
European Central Bank (ECB)Lagarde reiterated his intention to raise rates in July and September, stating that the authorities’ stance to curb inflation will remain the same despite growing concerns over tensions in financial markets. He said he “will raise the policy rate by 25bp” for the July meeting.Also of the members of the ECB Policy CommitteeCentral Bank Governor Kazarks Latvia told Bloomberg that while the ECB is ready to respond to unjustified financial market movements, it also needs to be prepared to stay abreast of market turmoil associated with the exit from negative interest rates. ..
“Unstable without credible behavior”
St. Louis Federal Reserve Bank of St. Louis”Without credible action by U.S. monetary authorities, inflation expectations could destabilize, which could lead to a new regime of high inflation and volatile real economy movements,” said Bullard. rice field. “Current macroeconomic trends in the United States undermine confidence in the US financial authorities on inflation targeting,” he said. He acknowledged that the US labor market remained strong and said production was expected to continue expanding throughout 2022.
Almost half of the Ukrainian economy stopped and the president
Ukrainian President Volodymyr Zelensky pointed out that the invasion of Russia has shut down almost half of the domestic economy and warned that it would continue to pose a serious risk of the global food crisis. The European Union (EU) is expected to finalize the details of its € 9 billion financial assistance to Ukraine within a few days. High-ranking Swedish and Finnish officials have made some progress in discussions with Turkey over the North Atlantic Treaty Organization (NATO) application.
View that pressure will be relaxed in the second half of this year
High inflation and sharp rate hikes are putting pressure on the stock market, but this may not continue in the second half of this year.JP Morgan’s strategist predicted. Inflation is likely to fall from current levels, with federal funds rate futures already moving in a narrow range, Misslab Mateika and colleagues said in a report. “The argument that the Fed’s hawkishness has peaked has been delayed, but that possibility has not been ruled out in the second half,” he said.
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French President Emmanuel Macron loses majority in parliament-reform stagnates or cabinet reshuffle