Market story on June 20: Story of Fed rate hike

 

The dollar remained in value after a Federal Reserve official argued for another 75 basis point rally in July. Germany restarted its coal-fired power plants and will introduce auction plans to reduce gas consumption after Gazprom cut supplies by 60 percent last week. 


Emmanuel Macron lost a parliamentary majority in France, while China ignored opportunities to loosen monetary policy. Bitcoin rebounded after falling below $ 18,000 over the weekend, but the oil sell-off continues due to concerns about the economic slowdown that slightly improves the supply outlook. Here's what you need to know in financial markets on Monday, June 20.



1. The dollar remains high as Fed officials argue for another 75 basis point rally

The dollar remains close to its 19-year high last week after a Federal Reserve official said he wanted a 75 basis point gain at his July meeting.



“If the data came as I expected, I would support a similarly scaled move at our July meeting,” said Washington, D.C. headquarters Governor. Christopher Waller said on Sunday.



In another development, Cleveland Fed President Loretta Mester told CBS it would take two years to bring inflation down to the Fed's 2% target and acknowledged that the Fed's delayed response to the threat has increased. the risk of a US recession.



2. Germany restarted coal-fired power plants after gas supplies were cut

Germany said it would restart several coal-fired power plants to ensure energy supply security, after Russia cut gas flows by 60% for its biggest customer last week.



The move risks delaying Germany's progress toward phasing out coal, which was already agreed upon as part of the current government's coalition agreement. The supply cuts of Gazprom (MCX: GAZP) have resulted in a steady increase in inventories in recent weeks.


Deputy Prime Minister and Economy Minister Robert Habeck also said he would introduce an auction system aimed at reducing gas consumption from this summer, but gave little information on how it works.



European gas prices hit new three-month highs following news.

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