Morning bid: heading for recession

An employee completes a sales display at a Naturalia organic food supermarket operated by Casino Group, following the outbreak of the coronavirus disease (COVID-19), in Bretigny-sur-Orge, near Paris, France, July 30 2020. REUTERS/ Benoitt Tessier

A Day ahead of Anshuman Daga’s European and Global Markets

Will activity take a double whammy after the latest data confirm fears of a runaway rise in euro-zone consumer prices?

While European Central Bank board member Isabel Schnabel did not rule out a technical recession in the 19-nation bloc in an interview with Reuters last week, the eurozone’s flash PMIs will be closely watched for recession risks this week. read more

August data, expected on Tuesday, may show another month of contraction in business activity after S&P Global’s latest composite PMI index plunged to a 17-month low in July.

Any further weakness could spell more bad news for the euro as it stumbled to a new five-week low on Monday.

High energy prices and shortages are already putting pressure on companies in the eurozone.

In the latest blow, Russian state energy giant Gazprom says it will stop supplying natural gas to Europe for three days at the end of the month.

Gas prices in Europe are already near their highest level in five months. Europe is racing to refuel for the winter.

Flash PMI data from Britain and the United States are also expected on Tuesday.

Economists in a Reuters poll expect the Federal Reserve to raise interest rates by 50 basis points in September amid expectations that inflation has peaked and concerns about the recession are mounting, but said risks are moving higher. peak shifted. read more

The main story of the day saw China cut its benchmark lending rate, on top of last week’s easing measures, as Beijing pulls out all the stops to revive an economy hampered by a real estate crisis and a COVID resurgence. -19 cases.

Growing pains held back Asian equities on Monday, while unease over the Chinese economy dragged the yuan to its 23-month low.

Key developments that could affect the markets on Monday:

China lowers credit benchmarks to revive faltering economy: read more

Nord Stream 1 pipeline closes for three days in final fuel surge to Europe: read more

Asian stocks in the red: read more

Reporting by Anshuman Daga; Editing by Jacqueline Wong

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