This week we will focus on ECB monitory policy meeting on 8-Sep-22. Currently ECB key rate stands at 0.50% whereas latest inflation numbers released for August for EURO zone at flash CPI came @ 9.1% Vs expectation of 9.0%. Core CPI inflation came @ 4.3% Vs expectation of 4.1%.
Energy Crisis in Europe
Energy prices have soared in Europe as Russia has slashed natural gas supplies to the continent, with fears of more drastic cuts in the winter amid tensions between Moscow and the West over the war.
Equichain Wealth Advisors: Key points
Central banks across the world were following similar monitory policy to fight demand slowdown & lockdown post COVID-19, but as things have turned normal, different regions have different issues and solutions also need to different accordingly.
Biggest game changer for Europe is sanctions put on Russia by US & European countries to isolate Russia economically, but it backfired and worst impact is now seen in Europe. US & RUSSIA, currency of both these countries have been strong post Russia-Ukraine crisis.
Global central banks have to choose pain & tight monitory policy for long term sustainable growth and bring inflation under control. Country which will manage to bring inflation under control will be first to return to accommodative interest rate policy.