Earlier today I spoke BNNBlooomberg about the shifting outlook for rate hikes at central banks in the US and Europe. I talked about why the ECB could be making a big mistake this Thursday and why Europe could be facing its biggest challenge since WWII. In addition, I laid out my view on the Canadian dollar and overall concerns about global growth.
Today the risk trade bounced but it will struggle to sustain gains at a time when there are such big questions about the outlook for Europe. Today, ABN Amro estimated a 1.5% GDP hit to the eurozone if Russian gas is cut off, I think it will be much larger than that. In addition, the inevitable subsidies from European governments means government budgets will be further strained.
For more trading videos and education, subscribe to our YouTube channel.
The ECB meets this week and will unveil an anti-fragmentation tool. Rather than focusing on the 25 bps hike that will come with it, I view this as a step towards a new and semi-permanent regime of QE, if not monetary financing.
