Europe on the brink of recession. What will the week bring?

The positive mood on the markets has been going on for several weeks, but the real change in investors' attitude was caused by the November meeting FOMC. It did not bring a major breakthrough - the Fed kept interest rates unchanged - but the change in the trend on the bond market supported the upward dynamics of the American stock indices. The situation in the US is starting to look better.

What's next for Europe?

The optimism of market bulls was also supported by the publication of the American CPI report for October - after the November FOMC meeting, better than expected inflation data strengthened the market belief in next year's interest rate cuts in the United States. The disinflation process in the US is supported primarily by lower energy prices and (to a lesser extent) the normalization of used car prices.

The drop in prices at gas stations was fueled by the drop in prices themselves oil. black gold has been falling for almost four weeks due to the uncertainty surrounding the ongoing Israeli-Palestinian conflict. However, this uncertainty is starting to fade, and markets are paying less and less attention to the situation in the Gaza Strip, believing that the ongoing fighting will remain only a local conflict. The efforts of OPEC countries, which are considering further cuts in oil production in order to increase the pressure on the price of the raw material, are also important.

The end of the era of cheap energy, ambitious climate policy and the weakness of industry combined with high interest rates are starting to affect the euro zone economy. How much is the market pricing in rate cuts? EBC in 2024, this may not be enough to save the European economy from recession.

In today's webinar:

• Soft landing in the USA, recession in Europe?
• Will the growth on the WSE be maintained?
• Xi in the US – is this a breakthrough?

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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