The European “central” is in a difficult situation because of the “euro” economy

The European “central” is in a troublesome scenario due to the “euro” financial system

World By Aug 22, 2023 No Comments

Tariq Al-Rifai, CEO of the Corum Middle for Strategic Research, stated that the latest rises in US Treasury bond yields are partly linked to expectations that rates of interest will stay excessive for an extended interval.

Al-Rifai added in an interview with “Al-Arabiya” that there are different issues that have an effect, together with the efficiency of the US financial system and the return to rise, in addition to there are at the moment pressures to return to a excessive price of inflation.

And he continued, “We noticed the latest rise in inflation through the previous month, and at the moment mortgages, the rate of interest on them is on the highest degree in additional than 20 years, and all these considerations and hikes pushed traders to the path of excessive rates of interest that will probably be for an extended interval, and the Fed might proceed to lift curiosity.” .

Al-Rifai anticipated that the tone of the US Federal Reserve Chairman will probably be strict within the Jackson Gap conferences this week, and that will probably be adopted by the Fed’s assembly subsequent September, which is able to witness a choice on elevating or fixing rates of interest.

Relating to the anticipated statements by European Central Financial institution President Christine Lagarde, on the Jackson Gap conferences, he stated that the European sector, particularly the eurozone, is in a troublesome scenario right now, particularly for the reason that inflation price remains to be traditionally excessive, and on the similar time there’s stress on the European Central Financial institution to proceed elevating rates of interest, whereas Financial efficiency in Europe remains to be very weak, and we have now not seen any sort of return to development, particularly in international locations resembling Germany, the Netherlands, and others.

He identified that this implies a great efficiency of the greenback towards the euro final July and through the present 12 months there was a robust decline of the greenback towards the euro, and I imagine that the interval of correction of the greenback has ended and now the wave of restoration of the greenback towards the euro and different currencies has begun.

“I count on from now till the tip of the 12 months that the greenback will proceed to rise towards the euro till the tip of the 12 months,” he stated.

He said that this rise within the greenback will translate into weak point in gold, which exceeded $2,000 an oz. throughout this 12 months, then declined, and since then it has not been in a position to exceed this degree once more, which is able to give it sturdy help within the coming months.

Relating to US shares, Al-Rifai stated, “We noticed an enormous distinction within the efficiency of the Nasdaq or the expertise sector index and the Dow Jones index, which signifies the division within the inventory market.”

He continued, “Some sectors within the US financial system and monetary markets carry out very strongly, particularly the expertise sector and different sectors which have weaknesses. We have now not but seen the restoration of the banking monetary sector after the collapse of some banks in March and Could, even the commercial sector started to indicate its weak point.”
Al-Rifai added that the present document highs in Nasdaq have to be adopted by a correction interval. Will it begin now, or will the document highs proceed, and this matter is unknown.

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