The key indices of the US stock market - Dow Jones, NASDAQ, and S&P 500 - ended Wednesday with a slight increase. There were no really important macroeconomic messages during the day yesterday, and traders paid more attention to the foreign exchange market, where the US dollar made an impressive somersault in the afternoon, falling heavily against the euro and the dollar. Moreover, it is still not entirely clear why this happened and how long it will last? There is, of course, an assumption that the whole thing is in the report on crude oil reserves in the United States, which showed an increase of 9 million barrels with a forecast of +1 million. However, this is only a hypothesis. Technical reasons for the growth of the euro and the pound against the dollar are also possible. Time will tell.
Meanwhile, gas prices have risen to $ 7 per 1 million British thermal units. If we translate this value into more familiar cubic meters, then the cost of gas now exceeds $ 1,500 per 1 thousand cubic meters. In other words, the price of gas continues to rise. And, of course, it can pull the prices of everything around the world up. That is, inflation due to rising energy prices may continue to accelerate in the EU, the US, and the UK. As we have already said, only the States have the necessary economic strength that allows them to raise the key rate to 3.5% in the next year and a half. It is precisely this tightening of monetary policy that can slow down the consumer price index. But it will take time.
But Europe is not just unable to raise rates now, it is also on the verge of an energy crisis. Now it's still good that winter is over, and the need for gas has fallen. There are 5-6 months until next winter to resolve the issue with gas supplies. Recall that the EU wants to abandon the import of Russian gas and oil, but understands that it cannot replace them in a short time with hydrocarbons from other countries. And no matter where the EU imports energy, prices are the same everywhere (plus or minus). Even more, long-term contracts for the supply of gas from the Russian Federation are now in force for the EU, which were concluded at the old prices, which are 5-6 times lower than the current ones. If you break these contracts and sign new ones with anyone, then the prices will be new. That is, the rejection of gas from Russia will lead to the fact that gas and heating in the European Union may jump in cost by 5-6 times. It is not surprising why the European Union does not abandon Russian hydrocarbons, despite all the threats from Brussels and officials. However, many experts believe that under pressure from the United States, the European Union will sooner or later impose an oil and gas embargo. This may lead to an even greater increase in energy prices. The EU economy is on the verge of recession.