Gas Prices are Flooding Europe and Stock Markets are Cooling Off During the Summer Period

UK & Europe: Gas prices are rising

The price of gas in Europe rose sharply last week off the back of a strike warnings of two important Australian gas plants.

The price consequently shot up by 40%, striking to the highest level since early summer 2023.

Even minor news strongly affects the fragile gas market, according to Jens Nærvig Pedersen, chief analyst at Danske Bank, who closely follows the energy market.

He points out that even though it is only an announced strike so far, there is still concerns. He also points out that it is too early to say whether the gas crisis will flare up again.

Meanwhile in the UK, a rise in tax proceeds from British property disposals hints at a bigger-than-expected selloff by the nation’s landlords.

There has been a hike in properties sold by landlords, which have risen to 25,000 between April and May from 22,000 in February and March, according to forecasts based on an analysis of capital gains tax receipts compiled by Savills Plc.

Americas: Inflation is Here to Stay

Inflation has increased for the first time in 13 months, with inflation ending at 3.2% in July.

This result is slightly lower than the expected 3.3%. But at the same time, higher than the 3.0% we saw in June.

It’s worth noting that core inflation, which excludes the more volatile energy and food prices, continued its fourth decline in a row, down to 4.7% in July after reaching 4.8% in June.

The US’s latest inflation figures show that the Federal Reserve's monetary policy has indeed worked, but that we have not yet reached the desired level.

Mary Daly from the US centralbank (Fed) emphasizes that there is still work to be done to reach the inflation target of 2%.

Unsurprisingly, this announcement spooked the markets a bit, due to fears that more interest rate hikes could be on the horizon.

Asia and Australasia: Deflation in China

While large parts of the world have experienced unusually high levels of inflation, China is in a completely different situation.

In fact, China is experiencing deflation as prices of goods in Chinese stores are falling.

In July, consumer prices in China were 0.3% lower than they were in July last year, and marks the first time since February 2021 that there has been a decrease in Chinese prices.

However, it is not entirely unexpected that the Chinese market is moving in this direction. In fact, China was already on the brink of deflation in June. 

Even though high inflation isn’t good, it isn’t necessarily positive to have deflation either. The ultimate goal is to have inflation on the 2% mark, in order to be considered a healthy and happy economy.

Stock World: Markets Cool Off During Summer

With most the world enjoying the summertime and taking vacation, this is very much reflected in the stock market right now.

The biggest of the quarterly reports is complete and there have been some quite big rises in the stock market the last half year. It therefore comes as no surprise that the stock market cools down a bit during August.

As we can see, both the German DAX40 and the American S&P 500 are down, whilst the UK’s FTSE 100 is up by 0.43%.

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