This week belongs to the central banks

The new week in the financial markets started with another installment of the energy crisis in Europe and the same topic will resound at its end, but most of all it will be a week marked by central banks' decisions on interest rates.

The Euro dollar broke the 0,9900 level

Spin by Russian Gazprom the gas tap on the Nord Stream 1 gas pipeline has sparked a new wave of concerns about the consequences of the energy crisis that is consuming Europe. The reaction of the markets was immediate. Course EUR / USD dropped below 0,99 and was at levels not seen for two decades. The moods also deteriorated on the stock exchanges. Especially on the trading floor in Frankfurt, which is understandable, because the indefinite suspension of gas supplies is currently affecting Germany.

However, fear did not turn into panic. On the contrary. We managed to tame him a bit. As a result, the EUR / USD and DE40 slightly increased, minimizing morning losses. 

EUR / PLN daily chart. Source: Tickmill

DE40 daily chart (CFD on the DAX 40 index). Source: Tickmill

Energy crisis in Europe

The topic of the energy crisis will remain relevant all the time. Until the end of the week. Especially that it is on Friday, September 9, that an extraordinary summit of EU energy ministers will be held, during which decisions are to be made to ease the situation on the energy market.

Although the energy crisis is currently absorbing the attention of the markets, this week that has just started will be primarily central bank week. 

On Tuesday (September 6) he will make a decision on interest rates Reserve Bank of Australia. There is no doubt that the market will raise interest rates by 50 basis points (bp) in response to the persistent inflation risk. This decision will mean the main rate in Australia will rise to 2,35%.

On Wednesday, decisions will be made on monetary policy in Poland and Canada. Everything indicates that, however The Monetary Policy Council (MPC) will have a hard nut to crack, it will ultimately raise interest rates only by 25 bp to 6,75 percent.

A much higher rate hike will take place in Canada, where the central bank will most likely decide to move rates up by as much as 75 bp. This would mean an increase in the main rate to 3,25%.

He will make a decision on Thursday European Central Bank. The market recognizes that the bank will incur rates by a minimum of 50 points, but allows for the possibility of their increase by 75 points. This scenario is indicated by almost half of the economists surveyed by the Reuters agency. If it materialized, the deposit rate in the euro area would increase to 0,75%, and the refinancing rate to 1,25%.