Discussion of raising the Fed rate, the rebound of bitcoin, the defeat of Macron


© Reuters.

Written by Jeffrey Smith

Investing.com – The dollar remains higher after the Fed spokesman called for another increase of 75 basis points in July. Germany is restoring its coal-fired power plants and introducing a system of auctions to reduce gas consumption after Gazprom cut supplies by 60% last week. Emmanuel Macron is losing his parliamentary majority in France, and China is losing the opportunity to soften its monetary policy. Bitcoin is recovering after falling below $ 18,000 at the end of the week, but the fall in oil continues as fears of a recession are met with a slight improvement in the supply forecast. Here’s what you need to know about the financial markets this Monday, June 20th.

1. The dollar remains bullish, as Waller is in favor of another increase of 75 basis points

That figure remained close to the 19-year high it reached last week after a Federal Reserve official said he wanted another rate increase of 75 basis points at the July meeting.

“If the data meets my expectations, I will support a movement of the same magnitude at our meeting in July,” said Washington Governor Christopher Waller on Sunday. However, Waller, the notorious hawk, also seems to have rejected the idea of ​​a 1 percentage point increase, saying there are limits to how fast the Fed can move.

Separately, Cleveland Fed Chairman Loretta Mester told CBS (NYSE 🙂 that it would take two years to return inflation to the Fed’s 2% target, and acknowledged that the Fed’s belated threat increased the risk of recession in the United States.

2. Germany resumes coal-fired power plants after the gas supply is cut off

Germany has said it will restart some coal-fired power plants to ensure security of supply after Russia cut gas flows to its main consumer by 60 percent last week.

The move risks delaying Germany’s slow progress towards the gradual withdrawal of coal, as agreed in the current government’s coalition agreement. However, this improves the country’s chances of replenishing its gas storage facilities before winter. The reduction in supplies from Gazprom (MCX 🙂 suddenly put an end to the fact that there has been a steady rise in shares in recent weeks.

Vice Chancellor and Economy Minister Robert Habeck also said he would launch an auction system this summer to reduce gas consumption, but gave little indication of how it would work.

In response, control prices reached a new three-month high.

3. World stocks are rising as China’s central bank resists the temptation to cut interest rates; Lagarde’s testimony is expected

As US markets close on June 19, Asian and European markets are growing.

The Central Bank of China turned down overnight to cut its most important key interest rate, signaling that it is still more concerned about the overall level of debt in the economy than the economic slowdown. Consumption due to COVID-19 wave closure.

European markets, meanwhile, have rejected news that French President Emmanuel Macron lost his parliamentary majority in elections to the National Assembly over the weekend as far-left and far-right members won at the expense of his centrist faction. French bonds showed low results during the quiet morning session of the eurozone debt.

The President of the European Central Bank will address the European Parliament at 3 p.m.

4. Bitcoin is recovering, but DeFi networks are still struggling

recovered, ending a five-day losing streak after falling shortly below $ 20,000 last weekend.

As of 1:30 p.m., the largest asset in the crypto space was trading at $ 20,502, which is 3.0% more than last Sunday. However, on Saturday it fell below $ 18,000, falling below its previous cycle high for the first time in 2018.

However, pressure on less liquid cryptocurrency networks continued to create problems. Celsius Network, one of the few creditors to suspend withdrawals last week, said it would take longer to recover, while the DeFi Bancor platform suspended its so-called “loss protection” mechanism. “non-permanent” less than a month after its launch.

Solend, a blockchain-based network, said it had taken an oversized position run by one member to reduce its systemic risk.

5. Slow down the fall of oil

Oil prices continued to decline, although sales slowed Friday’s gap, fueled by fears of a recession.

By 13:30 futures on the stock exchange fell 0.4% to $ 107.53 per barrel, while futures fell 0.8% to $ 112.20 per barrel.

News agencies report that Libya has managed to resume production of up to 800,000 barrels per day after a wave of protests and disruptions to export capacity. The forecast for an increase in supplies to the United States also continues to improve: last week Baker Hughes rose another 4 units to a maximum of 584.

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