Situation in Europe is quite uncertain, the worst may yet be to come – Commerzbank
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With the successes of the Ukrainian army sentiment on the markets improved a little at the start of the week. However, Antje Praefcke, FX and EM Analyst at Commerzbank, is sceptical. The worst may yet be to come.
“I am cautious with a view to the ECB and positive reactions of the euro in response to hawkish comments. The more the ECB does its frontloading, i.e. hiking the key rate short-term, the less might follow at a later stage. Above all, if the economy deteriorates significantly in the winter as a result of an energy crisis. Moreover, the ECB will have to deliver first what the market is pricing in.”
“The worst – in the shape of a tough winter with tight energy supplies and a recession which will cause the ECB to become more cautious again – may yet be to come. Even though I would, of course, be relieved if we were able to avoid that.”
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