Commission has taken various measures to ensure swift execution of their proposed legislation.
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Investors worldwide are bracing for more barrage from rising interest rates, particularly in the United States, causing a meltdown in riskier assets like cryptocurrencies and stocks. Timo Emden of Emden Research warns, "Inflation worries and the resulting fear of speedy interest rate hikes have caught up with investors."
The DAX plummeted by 1.1 percent to 13,547 points, while the EuroStoxx50 declined by one percent. Bitcoin faced a steep dip, losing up to 8.6 percent to a three-week low of $21,397.
To combat rampant inflation, the US Federal Reserve bumped up its key interest rate by 0.75 percentage points in July, mirroring its June move. The interest rate now falls within a range of 2.25 to 2.50 percent. Experts like Jane Foley of Rabobank in London believe that the Federal Reserve still has a significant amount of ground to cover to tame inflation. Amidst speculation of more aggressive rate hikes in the U.S., the dollar index surged to its highest level in four weeks, reaching 107.9100 points.
The euro took a hit, trading at a five-week low of 1.0053, teetering on the brink of parity. Soaring German producer prices stoked fears of escalating inflation. Inflation averaged 37.2 percent in July, majorly driven by escalating gas and electricity costs. Although another interest rate hike in the Eurozone is likely due to soaring inflation, discussions about the European Central Bank raising its key interest rate by 25 or 50 basis points in September underscore the ECB's sluggish response compared to the Fed. Esther Reichelt of Commerzbank argues, "Given the increasingly gloomy growth outlook, this could pose problems for the euro."
Meanwhile, Just Eat Takeaway.com shone in corporate performances. The European food delivery giant sold its 33 percent stake in Brazilian company iFood to Prosus for €1.8 billion. Shares of Just Eat Takeaway.com skyrocketed nearly 31 percent on the Amsterdam stock exchange, with Prosus shares rising 0.5 percent and Just Eat rival Delivery Hero gaining 1.5 percent in the MDax. HelloFresh shares rose two percent, while Deutsche Bank's shares dropped nearly three percent, making them the worst performer in the DAX.
Economic concerns took a toll on commodity prices. North Sea oil Brent and US oil WTI both slid by 1.6 percent, hitting $95.05 and $89.01 per barrel, respectively. Gold's value dwindled due to a stronger dollar, falling to $1,749 per ounce, its weakest level in three weeks. The dollar's strength makes commodities more costly for investors outside the US.
- Timo Emden's warning about inflation worries and fear of rapid interest rate hikes could potentially impact various sectors of business, including finance and investing in the stock-market.
- Despite the downturn in the stock-market and cryptocurrencies, the performance of Just Eat Takeaway.com in corporate deals, such as selling its stake in iFood, has shown a positive trend in the technology sector, specifically in gadgets like smartphones, given its presence in food delivery.
- The US Federal Reserve's aggressive stance on interest rate hikes to combat inflation could increase the value of the dollar, which, in turn, could adversely affect the prices of technology gadgets, smartphones, and commodities like oil and gold, making them more expensive for investors outside the United States.
- The European Central Bank's perceived sluggish response to inflation compared to the Fed may pose challenges for the euro, as discussed by Esther Reichelt of Commerzbank, increasing concerns about the future of the single currency.
