After recent data confirmed fears of a runaway rise in consumer prices in the Eurozone, will business take a double hit?
While European Central Bank Governing Council member Isabel Schnabel did not rule out a technical recession in the 19-nation bloc in an interview with Reuters last week, eurozone PMIs will be closely watched for recession risks this week.
August data, expected on Tuesday, may show another month of contraction in business activity after S&P Global’s final composite PMI fell to a 17-month low in July.
Further weakness could lead to more bad news for the euro, which fell to a five-week low on Monday.
High energy prices and energy shortages are already putting pressure on business in the Eurozone.
The final blow is that Russian energy giant Gazprom has said it will stop supplying Europe with natural gas for three days at the end of the month.
Gas prices in Europe have been high for nearly five months. Europe is rushing to refuel for the winter.
Flash PMI numbers from Britain and the US are also expected on Tuesday.
Economists polled by Reuters expect the Federal Reserve to raise interest rates by 50 basis points in September as inflation is expected to peak and fears of a recession grow, but they said risks tilt toward a higher peak.
Chart: Reuters Poll – US Recession Possibility – https://fingfx.thomsonreuters.com/gfx/polling/egpbkdwndvq/Reuters%20Poll-%20U.S.%20recession%20probabilities.PNG
The main news of the day was that China slashed its benchmark lending rate along with its easing measures last week, while Beijing is scrambling to revive an economy crippled by the real estate crisis and a rebound in COVID-19 cases.
Growing pains kept Asian stocks lower on Monday, while concerns about the Chinese economy pushed the yuan to a 23-month low.
Key developments that may affect the markets on Monday:
China lowers lending standards to revive faltering economy
Nord Stream 1 pipeline is closed for three days in the final fuel increase for Europe:
Asian stocks in the red:
