Icon close
  • Tenga en cuenta que el sitio web está destinado a personas que residen en jurisdicciones donde el acceso está permitido por ley. STARTRADER y sus entidades afiliadas no están establecidas ni operan en su jurisdicción de origen. Al invertir a través de este sitio web, es importante comprender que no está regulado por la Comisión Nacional del Mercado de Valores (CNMV) y usted no tendrá las protecciones que brinda la CNMV.

    Si decide continuar y visitar este sitio web, reconoce y confirma lo siguiente:

    1. STARTRADER no tiene sede en España ni licencia de la CNMV.
    2. Usted accede al sitio web por iniciativa propia y STARTRADER no se lo ha solicitado de ninguna manera.
    3. Desea obtener información de este sitio web, que se proporciona mediante solicitud inversa de acuerdo con las leyes de su jurisdicción de origen.
    4. Invertir a través de esta web no te otorga las protecciones previstas por la CNMV.
    5. Si decide invertir a través de este sitio web o con cualquiera de las entidades de STARTRADER, estará sujeto a las normas y regulaciones de las autoridades reguladoras internacionales pertinentes, no a la CNMV.

    STARTRADER quiere dejar claro que se encuentra debidamente licenciado y autorizado para ofrecer los servicios y productos financieros derivados enumerados en el sitio web. Las personas que acceden a este sitio web y registran una cuenta comercial lo hacen por su propia voluntad y sin solicitud previa.

    Al confirmar su decisión de continuar e ingresar al sitio web, por la presente afirma que esta decisión fue iniciada únicamente por usted y que ninguna entidad de STARTRADER ha realizado ninguna solicitud.

  • Si prega di notare che il sito web è destinato a individui residenti in giurisdizioni dove l'accesso è permesso dalla legge. STARTRADER e le sue entità affiliate non sono né stabilite né operanti nella vostra giurisdizione di residenza. Quando si investe tramite questo sito web, è importante comprendere che non è regolamentato dalla Commissione Nazionale per le Società e la Borsa (CONSOB), e non si avranno le protezioni offerte dalla CONSOB.

    Se si sceglie di procedere e visitare questo sito web, si riconosce e si conferma quanto segue:

    1. STARTRADER non ha sede in Italia né è autorizzata dalla CONSOB.
    2. Si sta accedendo al sito web di propria iniziativa e non si è stati sollecitati in alcun modo da STARTRADER.
    3. Si desidera ottenere informazioni da questo sito web, che sono fornite su base di sollecitazione inversa in conformità con le leggi della propria giurisdizione di residenza.
    4. Investire tramite questo sito web non concede le protezioni fornite dalla CONSOB.
    5. Se si sceglie di investire tramite questo sito web o con una qualsiasi delle entità STARTRADER, si sarà soggetti alle regole e ai regolamenti delle relative autorità di regolamentazione internazionali, non alla CONSOB.

    STARTRADER desidera chiarire che è debitamente autorizzata e abilitata ad offrire i servizi e i prodotti derivati finanziari elencati sul sito web. Gli individui che accedono a questo sito web e registrano un conto di trading lo fanno completamente di loro iniziativa e senza sollecitazioni precedenti.

    Confermando la vostra decisione di procedere ed entrare nel sito web, affermate che questa decisione è stata iniziata esclusivamente da voi, e che non è stata fatta alcuna sollecitazione da parte di alcuna entità STARTRADER.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

21 April

Here we will explain inflation and global growth and we will link them to the most recent events in the world.

Inflation by definition is increasing products prices over time, which is healthy for economies until a certain level. Inflation currently in most countries is way above the healthy rates, which affects individuals’ ability to utilize their income efficiently and undermines currencies exchange rates.

COVID-19 Pandemic and supply chain interruption are reasons that sparked the inflation rates globally, but nothing accelerated inflation rates and slowed global growth the way the Russian war did.

Inflation Cycles

The inflation rate in the United States is the highest since 1981, which was a year before the rescission of 1982-1983. Meanwhile, the inflation rate in England is the highest in 30 years, which was a few months before the recession of 1990 through March 1991. Do we expect a new recession?

Over history, recission hit in cycles. Each cycle between recessions was 10-15 years (1981,1990, 2000, and the great recession of 2008). This means the answer is “Yes, we should expect a new recession”.

Every cycle we see the same sequence of events, inflation rates go high, central banks increase their interest rates, equity markets fly high, and then an economic free fall.

Major Economies Inflation

United States:

The Consumer Price Index in the United States rose 8.5% for the 12 months ending March 2022, the largest 12-month increase since December 1981. The all items less food and energy index rose 6.5%, the largest 12-month change since the period ending August 1982. The energy index rose 32.0% over the last year, and the food index increased 8.8%, the largest 12-month increase since the period ending May 1981. (Source: www.bls.gov)

United Kingdom:

Moreover, in the United Kingdom, the Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 6.2% in the 12 months up to March 2022, up from 5.5% in February. Moreover, the Consumer Prices Index (CPI) rose by 7.0% in the 12 months up to March 2022, up from 6.2% in February. (Source: www.ons.gov.uk).

Eurozone:

Euro area annual inflation was 7.5% in March 2022, up from 5.9% in February according to the statistical office of the European Union (Eurostat). Energy has the highest annual rate in March (44.7%, compared with 32.0% in February), followed by food, alcohol & tobacco 5.0%, and non-energy industrial goods 3.4%.

In all three regions covered previously, Energy was the major contributor to the increase in CPI figures, but in Europe, it has the highest effect. The reason why the European Union is suffocating under energy prices is due to the dependency on Russian energy. Matter of fact, Russia is the major gas supplier to Europe.  However, The U.S., Europe, and other countries phased sanctions on Russia which interrupted the energy and supply chain.

Recent Inflation Drivers

Inflation or prices increase is healthy for economies as long as it is under control. However, some events drive prices high and inflation rates go out of control.

Russian War

Russia’s invasion of Ukraine that started on February 24 affected the entire world. As IMF said, “Global economic prospects have been severely set back, largely because Russia invaded Ukraine”.

In another paragraph also “beyond its immediate and tragic humanitarian impact, the war will slow economic growth and increase inflation. Overall economic risks have risen sharply, and policy tradeoffs have become even more challenging”.

The effect of the Russian war goes beyond the risk that drove safe havens prices up. Russia is a major supplier of oil, gas, and metals, and, together with Ukraine, of wheat and corn. Reduced supplies of these commodities have driven their prices up sharply. And as a result, the surge in food and fuel prices will hurt lower-income households globally.

COVID-19 and Oil Supply

COVID-19 hit the global economy hard enough. Above all it interrupted the global supply chain, drained individuals’ resources and forced companies out of business.

China, one of the world’s most important exporters and shipping hubs, has been on a lockdown for a while and has rarely been able to recover from the pandemic. In its last report, the IMF said, “The latest lockdowns in China could cause new bottlenecks in global supply chains”.

Crude oil prices ballooned after reducing COVID-19 measures in most countries. As a result, fuel consumption increased extensively while the production rate was much lower than the demand. However, the latest COVID-19 outbreak in China dropped fuel consumption to a level that stressed oil producers.

Additionally, OPEC+ set their monthly crude oil production increase to 400 thousand bpd at average production of 77 million bpd. Meanwhile, the global crude oil consumption average is 97 million bpd (source: www.eia.gov). This supply and demand gap drove products and commodities prices to historical records.

Inflation and global growth

The Russian war reduced market sentiment and hindered the global economy’s recovery from the pandemic. Even before the war, inflation had been rising due to supply-demand imbalances prompting a tightening of monetary policy.

Compared to January forecast, IMF has revised its projection for global growth downwards to 3.6% in both 2022 and 2023. The growth outlook for the European Union has been revised downward by 1.1% points. Due to the indirect effects, the war was considered as the second-largest contributor to the overall downward revision.

IMF Global Growth numbers

Source: IMF.org