Take Five: Navigating the energy shock



Sept 9 (Reuters) - As Britain mourns the passing of its Queen, the country also faces its most serious economic crisis in decades and markets will ponder the implications of the new government's record-breaking energy package.

Leaders across Europe are scrambling to keep the lights on and U.S. inflation data on Tuesday should provide the last piece in the puzzle ahead of the Federal Reserve's September meeting.

China meanwhile is trying to get banks to help spur the economy and Volkswagen seems set to embark on listing luxury car maker Porsche against a volatile markets backdrop.

Here is a look at the week ahead in markets from Kevin Buckland in Tokyo, Sumanta Sen in Mumbai, Emma-Victoria Farr in Frankfurt, William Schomberg, Vincent Flasseur and Karin Strohecker in London, and Lewis Krauskopf in New York.

1/ BRITAIN IN CRISIS

Policymakers and investors are gauging the implications for inflation from the government's huge energy bill bailout for households. The measures will bring down price pressures in the short term but could stoke them further ahead as consumers are spared the worst of the hit to their finances.

The Bank of England has just postponed its meeting, originally scheduled for Sep. 15, to Sep. 22 following the death of Queen Elizabeth. Many economists think it will raise interest rates by a further 50 basis points - normally a huge increase but less than the 75 bps rate hike that investors had been betting on increasingly until a few days ago.

Policymakers will have a few more data points that are scheduled for release to chew over before then. Data on Monday showed Britain's economy grew by less than expected in July when it expanded by 0.2% from June. The latest job market readings are due on Tuesday and August inflation on Wednesday.

2/RUNNING OUT OF GAS

Faced with soaring energy prices that threaten to spark social unrest, necessitate rationing and inflict a recession, Europe's leaders are scrambling to pull together radical plans to counter Russian President Vladimir Putin's gas cut-off.

Governments are spending hundreds of billions of euros to help consumers and businesses cope with runaway bills. A plan from Britain's new government could cost as much as 150 billion pounds, sending its currency to near-four decade lows.

Paris announced on Monday it will extend current caps on gas and power prices in a move to protect French consumers.

European Union energy ministers on Friday tasked Brussels with drafting proposals within a few days to cap the revenues of non-gas energy producers and help power firms stay afloat but backed away from more divisive proposals to cap Russian gas prices.

Meanwhile more oil-importing countries - for example India - are considering joining the Group of Seven wealthy nations' plan to cap the price of Russian oil, Washington said.

3/PRICING POWER

Tuesday's U.S. inflation data is one of the last - and perhaps the most important - pieces of data that will help the Fed decide how aggressively it needs to hike rates in September.

July's CPI report showed a surprising moderation in prices that helped spur a rebound in stocks. That rally has since faded with Fed chair Jerome Powell warning that the Fed's single-minded fight to tame inflation could lead to economic pain.

On an annual basis, CPI increased by a weaker-than-expected 8.5% in July, with the inflation gauge coming in flat, month-over-month. Early estimates for August call for a 0.1% decline on a monthly basis, but wild cards such as volatile energy prices are keeping investors on edge.

4/ PUSHING ON A STRING?

A downside surprise on Chinese inflation data on Friday cheered markets because it seems to afford policymakers plenty of room to ease and help boost a flagging economy.

But loan figures out shortly afterward pointed to the dilemma: who wants to borrow in a downturn? Loan growth is scarcely budging, and a meagre rise in August was below analysts' hopes.

The central bank has already flooded the system with cash, without improving confidence, since there is no clear path out of a deepening property crisis or COVID-19 lockdowns.

More help has been promised, but is yet to meaningfully arrive, leaving the Hang Seng .HSI lingering near major lows and the yuan CNY=CFXS close to a two-year trough.

Data on industrial production, house prices and retail sales due on Sep. 16 will give more indications on the state of the world's second largest economy.

5/BOLD DEBUT

It's been a bleak year for capital markets. But that might not detract Volkswagen VOWG_pe.DE from listing luxury car maker Porsche.

Volkswagen fired the IPO starting gun even as European stock markets reeled from record inflation and the Russia energy standoff. The next three weeks will be crucial as bankers gather investor feedback and begin book building.

At the high end of estimates – investors expect a valuation between 60-85 billion euros ($60.4-$85.5 billion) - the IPO could be the largest in German history and the biggest in Europe since 1999, Refinitiv data showed.

Porsche will only backtrack on its stock market debut if "severe geopolitical problems arise", the sportscar brand's chief financial officer said on Tuesday. The Frankfurt Stock Exchange has only seen two SPACs and one small primary listing in 2022.

($1 = 0.9939 euros)



Bank of England under pressure Link
Put a cap on it Link
U.S. inflation Link
Yuan decline Link
European IPO volumes Link



Compiled by Karin Strohecker, editing by Elaine Hardcastle and
Susan Fenton

Disclaimer: De entiteiten van de XM Group bieden diensten en toegang tot ons online handelsplatform op basis van uitsluitend-uitvoering, waardoor een persoon de beschikbare content op of via de website kan bekijken en/of gebruiken, zonder dat dit is bedoeld voor wijziging of uitbreiding. Dergelijk(e) toegang en gebruik vallen onder: (i) de algemene voorwaarden; (ii) risicowaarschuwingen; en de (iii) volledige disclaimer. Dergelijke content wordt daarom alleen aangeboden als algemene informatie. Wees u er daarnaast vooral van bewust dat de inhoud op ons online handelsplatform geen verzoek of aanbieding omvat om transacties op de financiële markten uit te voeren. Het beleggen op welke financiële markt dan ook vormt een aanzienlijk risico voor uw vermogen.

Alle materialen die op ons online handelsplatform worden gepubliceerd zijn bedoeld voor educatieve/informatieve doeleinden en omvatten geen – en moeten niet worden beschouwd als het bevatten van – financieel, vermogensbelastings- of handelsadvies en aanbevelingen, of een overzicht van onze handelsprijzen, of een aanbod of aanvraag van een transactie in financiële instrumenten of ongevraagde financiële promoties voor u.

Alle content van derden, alsmede content die is voorbereid door XM, zoals opinies, nieuws, onderzoeken, analyses, prijzen en andere informatie of koppelingen naar externe websites op deze website worden aangeboden op een 'zoals-ze-zijn'-basis, als algemene marktcommentaren, en vormen geen beleggingsadvies. Voor zover dat content wordt beschouwd als beleggingsonderzoek, moet u zich ervan bewust zijn en accepteren dat de content niet bedoeld was en niet is voorbereid in overeenstemming met de wettelijke vereisten die zijn opgesteld om de onafhankelijkheid van beleggingsonderzoek te bevorderen en als zodanig onder de geldende wetgeving en richtlijnen moet worden beschouwd als marketingcommunicatie. Zorg ervoor dat u onze Mededeling over niet-onafhankelijk beleggingsonderzoek en risicowaarschuwing in verband met de voorgaande informatie doorneemt en begrijpt; die kunt u hier lezen.

We gebruiken cookies om u de beste ervaring op onze website te bieden. Meer lezen of wijzig uw cookie-instellingen.

Risicowaarschuwing: Uw vermogen loopt risico. Hefboomproducten zijn mogelijk niet voor iedereen geschikt. Lees onze informatie over risico's.