The rise of the US currency depletes their limited foreign exchange reserves and stunts growth by making their exports more expensive. The strengthening of the dollar over the past year due to continued interest rate hikes by the US Federal Reserve has put severe pressure on many emerging economies, which have seen their national currencies …
Category: Financial Markets
Loans: When is it beneficial to change the interest rate from floating to fixed?
The answer depends mostly on how close it is to expiration. Important factors are the rate of rise in interest rates, the margins on new loans and how much risk a borrower can bear. Since July, the ECB has raised interest rates by three percentage points, putting corresponding upward pressure on the benchmark floating rate, …
How the ECB Will Force Banks to Raise Deposit Rates
The monetary policy of the EU it seems at the moment to be on the one hand ineffective, on the other hand leading to a dead end causing negative effects on the economy, with no benefits for anyone except the banks who will see their profits increase from the increase in loan rates while they …
A Global Liquidity Crisis is beginning to appear on the Horizon
The dynamics of the global market vis-à-vis all those markets where a global liquidity that in 2019 reached 130 trillion dollars, well above the global GDP of 80 trillion dollars, is looking for a way out, tends to be the most decisive for the developments in the global economy. There are estimates that today this …
What do the Spread Control Mechanism mean for the EU Economy?
The 50 basis point increase in the ECB’s deposit rate, double what the ECB had initially communicated and in line with the hawks’ wish, was combined with the announcement of a new spread control tool, the Transmission Protection Instrument (TPI). The threat of recession is greater in Europe: the war in Ukraine and the energy …
Euro-Dollar Parity 1:1- Europe takes Steps Backwards Compared to the US
Each currency reflects the reality in the economy and is a tool of a specific economic policy. Reflecting at the same time, the general situation of the period, it is a matter of time, as everything shows, for the parity of the euro against the dollar to reach the absolute one-to-one and to fall below …
Greece Returns Rapidly to the Era of Financial Support Packages
Greece, a member-country of the Eurozone/EU with 388 billion euros in public debt and a deindustrialized economy, is in danger of paying dearly for the EU sanctions imposed on Russia. The debt of the General Government of Greece, despite being sustainable in the medium term, despite being supported by the ECB and despite the fact …
The South Eurozone on the red line due to the Explosion of Borrowing Costs
Due to rising global and mainly European inflation, interest rates are generally rising as central banks fight inflation and this is certainly not a time when investors want to increase their exposure to government bonds. Trust Economics points out that Greece’s public debt (Eurozone / EU country) remains viable despite rising borrowing costs and estimates …
Properties: Reasons to Boost Their Prices
The constant upward trend in property prices is an international phenomenon. In the Eurozone, the growth rate of house prices for Q2 2021 reached 6.8% on an annualized basis. Respectively, in OECD countries, nominal house prices increased by 12.3% on average, on an annual basis. The countries with the highest house prices were Turkey (30.2%), …
Inflation, energy and the upcoming tapering sank the markets
The ongoing tightening of monetary policy by the world’s major central banks creates a suffocating environment with increased chances of development leading to a major mix of crisis and recession. In addition, Joe Biden’s uncertainty about fiscal position directs investors to the security of fixed-income government bonds. America The 10-year T Bond has a yield …