The dollar index upsurges and it is at its 20-year high. Precisely, the dollar opened high on Monday morning and is currently trading around 107.425.
Inflation is hitting the consumer price index which is deteriorating the economy. An upcoming figure for the consumer price index will be released on Wednesday. Furthermore, predictors are anticipating an increase in percentage from 8.6 to 8.8 year on year basis. Now, if look into the last time’s non-farm payrolls data, the figure was way better than expected. The combination of both events lead FED to raise the interest rates either by 0.50 BPS or 0.75 BPS. Consequently, seems negative from the perspective of global growth.
Concerns about the supply
Moving further, the biggest pipeline which carries gas from Russia to Germany is about to enter its annual maintenance zone. Furthermore, the transmission will stop for 10 days thereby increasing the gas supply constraints.
The investors are showing concerns about the shutdown. Moreover, if the time period extends due to the invasion between Ukraine and Russia then the European Economy may struggle with their economy. As a result, fear of recession continues in the European country.
As I said earlier, FED has already stated that they will raise the interest rates either by 0.75 BPS or 0.50 BPS. An upcoming FOMC meet will be held on 27th July 2022. Now, for the next 15 days, the market will trade in a very tight range.
The spokesperson from German Economy Ministry says that the condition of gas supply is serious but they are assuring the guaranteed supply of gas in the days ahead.
Germany is the largest importer of natural gas. The conflict between Russia and Ukraine may shrink the economic output this time. Â Hopefully, the country may not face such kinds of challenges.
The Indian Stock Market seems sluggish today but we might experience a downside panic in the days ahead. Therefore, Nifty and Bank Nifty PCR are 1.22 and 1.33 respectively which is in a supporting zone. But, if the PCR goes below 1 then there the market may face a sharp downside panic in the next couple of days.