Economy and markets in 2023 - What will the week bring?

High inflation accompanied us throughout 2022 and was one of the leading topics of the past months. The decline in the prices of some raw materials, components and freight, which started in the last quarter of last year, has raised new hopes for the so-called pivot Fed and a retreat from restrictive monetary policy. However, despite the drop in the ISM price index for services in the United States, it is close to the highs of the previous decade. At best, this suggests a drop in inflation to only around 4%. Importantly, during previous recessions, the lag between the ISM price index for services low and the core inflation low was as much as 24 months.

Are the markets ready for lower liquidity?

US and European central banks are likely to continue to pull money out of the market. The Fed's balance sheet may fall below USD 7 trillion from USD 9 trillion at its peak in the coming months. Too European Central Bank intends to reduce liquidity in the markets by launching the QT program in March. However, already due to early repayments of TLTROs, the ECB's balance sheet has shrunk by around EUR 800 billion. How will lower liquidity affect the valuation of stock exchanges? What next for the Chinese real estate market? Will the cryptocurrency market recover from last year's scandals?

We invite you to a meeting with the Chief Economist XTB Przemysław Kwiecień, PhD, in which he will focus on the key topic of this week - what will affect the economy and markets in 2023?

In today's video:

• Will lower liquidity sink the markets?
• The impact of the war in Ukraine on the Warsaw Stock Exchange and PLN
• What's next for the cryptocurrency market?

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In addition, due to the very dynamic situation in the world, additional ones will be made available raports Video on the impact of war, pandemic and economic crisis on the global economy.

About the host

Dr Przemysław Kwiecień - Chief economist X-Trade Brokers. Doctor of Economics at the University of Warsaw, graduate of the University of Warsaw and London Metropolitan University (MSc). Holder of the prestigious CFA certificate. He has been working for XTB since 2007, previously he gained experience as an advisor to the Minister of Finance, Mirosław Gronicki, and an economist at Bank Millennium. At XTB, he manages the Analysis Department.

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