The challenge is to try and understand what the future holds for us in terms of the additional inflationary factors and especially the disruption in the supply chains, the energy crisis and the local level of each country.
In the world markets today a new trading week opens, the US markets ended the previous week with price increases before the holidays, in the local arena the flight will try to continue moving towards the 2000 gate when yesterday it continued to break records and ended with a half percent rise in 1960.
The dollar stands at 3.152, oil opens the week with a decline of about 1% and its price is $ 73, gold stands at 1810 per ounce, bitcoin has risen to $ 51,000.
Asia trading week opens with a mixed trend which is close to base levels, Nike and Shanghai are down against Hang Seng and India are rising, in the US the indices are trading pre-mixed with a mixed trend.
Why is inflation so important in 2022? Since in the current state of affairs, it is the one that will determine how much the central banks will raise the interest rate and hence the effect on the markets is completely clear. Let’s start with the good news – it is likely that in a year’s time the global inflation environment will be lower compared to today. All this assuming we do not see commodity prices continue to soar and we do not see another inflationary effect of opening up economies as we have seen this year.
However, these end effects are well known and already fully embedded in markets and forecasts. The challenge is to try and understand what the future holds for us in terms of the additional inflationary factors and especially the disruption in the supply chains, the energy crisis and the local level of each country.
The pressures on supply chains and the energy crisis in Europe are expected to generate another round of inflationary pressures on many products around the world in 2022, pressures that are not yet quite embodied in analysts’ forecasts. In addition, the jump in wages and the warming of real estate markets in a particularly high inflationary environment may produce sharper inflation dynamics in the services industries both in the world and in Israel, so in our view, inflationary risks continue to be high.
With global economic data in the background clearly signaling an economic slowdown – both due to the rapid closing of GDP gaps in Europe and the US, and due to the impact of new restrictions on activity due to Omicron – the challenge for central banks will be to navigate a clear economic slowdown.