The European Central Bank hiked interest rates by 50 basis points during its last monetary policy meeting of 2022, marking the fourth rate increase for the year. The central bank slowed the pace of increases; however, it remains committed to contain record high inflation and warned that further interest rate increases are required due to a substantial upward revision to the inflation outlook.
Average inflation is seen reaching 8.4% in 2022 before decreasing to 6.3% in 2023. Inflation is then projected to average 3.4% in 2024 and 2.3% in 2025. GDP for the Euro Area may contract in the current and next quarter, due to the energy crisis, high uncertainty, weakening global economic activity and tighter financing conditions. Overall, the central bank now sees the economy growing by 3.4% in 2022, 0.5% in 2023, 1.9% in 2024 and 1.8% in 2025.
European Union energy ministers on Monday finally agreed on a gas price cap at €180 per megawatt hour, in the latest attempt to lower gas prices that have pushed energy bills higher and have been the main culprit for record-high inflation this year.
The Ifo Business Climate indicator for Germany rose for a third consecutive month to 88.6 in December 2022, beating market expectations of 87.4. Sentiment improved despite high inflation and the ongoing energy crisis as expectations for the coming months were significantly less pessimistic (83.2 vs 80.2 in November).
According to Destatis, the German producer price index (PPI) fell 3.9% MoM in November, sharper than expected, compared to a 4.2% fall in October. The annual producer inflation in Germany fell to 28.2% in November 2022 from 34.5% in October, below market forecasts of 30.6%. Energy prices remained the biggest upward contributor, namely the distribution of natural gas and electricity. Excluding energy, producer prices climbed 12.7% from a year earlier.
The Gfk German Consumer Climate Index in Germany which measures the level of consumer confidence in economic activity was released on Wednesday. The GfK Indicator rose to -37.8 heading into January of 2023 from a revised -40.1 in December, beating market expectations of -38.0. The current reading of the forward-looking index marks the third straight month of a small but gradual improvement in sentiment amid government energy measures.
Germany’s Ifo economic institute said in a statement on Wednesday, the outlook for Germany’s labor market is expected to be upbeat for the first quarter of 2023, driven primarily by service providers.
Source: Tradingview
Equity markets embarked on a Santa rally on lack of major economic news this week; however global indices have been trading in the red during the festive week. The German benchmark index rebounded on Wednesday as consumer sentiment in Europe’s largest economy has improved. The market may attempt to finish the year on a positive foot on hopes the widely expected economic slowdown in 2023 may be milder than feared, despite the energy crisis and still high inflation.
However, traders continue to digest hawkish messages from major central banks and try to assess the impact that even higher interest rates will have on the economy in 2023. Given the strong rebound from the October 2022 low we continue to believe that near-term upside from here is likely to be limited and that 2023 is likely to be volatile with massive swings in both directions. We see high probability of declines in excess of 20% from current levels.
Active traders looking for magnified exposure to the German stock market may consider our 3x Long Germany 40 and -3x Short Germany 40 ETPs.
Violeta a rejoint Leverage Shares en septembre 2022. Elle est chargée de mener des analyses techniques et des recherches sur les actions et macroéconomiques, fournissant des informations importantes pour aider à façonner les stratégies d’investissement des clients.
Avant de rejoindre LS, Violeta a travaillé dans plusieurs sociétés d’investissement de premier plan en Australie, telles que Tollhurst et Morgans Financial, où elle a passé les 12 dernières années de sa carrière.
Violeta est une technicienne de marché certifiée de l’Australian Technical Analysts Association et est titulaire d’un diplôme d’études supérieures en finance appliquée et investissement de Kaplan Professional (FINSIA), Australie, où elle a été conférencière pendant plusieurs années.
Julian a étudié l’économie, la psychologie, la sociologie, la politique européenne et la linguistique. Il possède de l’expérience en matière de développement commercial et de marketing grâce à des entreprises qu’il a lui-même créées.
Pour Julian, Leverage Shares est une entreprise innovante dans le domaine de la finance et de la fintech, et il se réjouit toujours de partager les prochaines grandes avancées avec les investisseurs du Royaume-Uni et d’Europe.
Oktay a rejoint Leverage Shares fin 2019. Il est responsable de la croissance de l’activité à travers des relations clés et le développement de l’activité commerciale sur les marchés anglophones.
Il a rejoint LS après UniCredit, où il était responsable des relations avec les entreprises pour les multinationales. Il a également travaillé au sein de sociétés telles qu’IBM Bulgarie et DeGiro / FundShare dans le domaine de la finance d’entreprise et de l’administration de fonds.
Oktay est titulaire d’une licence en finance et comptabilité et d’un certificat d’études supérieures en entrepreneuriat du Babson College. Il est également détenteur de la certification CFA.
Sandeep a une longue expérience des marchés financiers. Il a débuté sa carrière en tant qu’ingénieur financier au sein d’un hedge fund basé à Chicago. Pendant huit ans, il a travaillé dans différents domaines et organisations, de la division Prime Services de Barclays Capital à l’équipe de recherche sur les indices du Nasdaq (plus récemment).
Sandeep est titulaire d’un master spécialisé en finance et d’un master en administration des affaires de I’Institut de technologie de Chicago.
