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Banks in The Eurozone About To Collapse?

London, Saturday, 1 October 2022

Futures for the US and EU are advancing. The differences between the stock exchanges in the US and Europe are becoming more and more clear. The ECB's forecasts were inaccurate as usual.

If Russia cuts off gas supplies and the sector adjusts to the energy shortfall, the Eurozone economy may experience a recession. Luis de Guindos, the deputy president of the European Central Bank, said this.

He stated: "If so, in our alternative scenario, we see a recession not only in Germany but in the Eurozone,"

In its base scenario, the ECB had forecast that growth would continue, albeit a little more slowly, this year and the next year. However, the unfavourable one pointed to a recession for the following year. When we examine the big picture, the results are consistently depressing.

Eurozone Investor Confidence Declines

Investor confidence in the 19 member nations of the Eurozone declines in July to its lowest level since May 2020, signalling a "inevitable" recession. From -15.8 in June, the Sentix index for the Eurozone dropped to -26.4. According to a Reuters poll, July's reading would be -19.9 points.

"The energy crisis is leading to considerable economic distortions,' Manfred Huebner, Managing Director of Sentix, said in a statement. "In every area, the dynamics are similar to the 2008 crisis year and what was then the collapse of the financial system is now the risk of a collapse in Europe's energy supply”, he added.

Earnings are generated or may be generated as a result of the mechanism's rules and the trend in rates. The ECB appears to want to revise the controls to at least partially stop the supplemental earnings.

Italians requested almost a fourth of the 2,000 billion that European banks requested. The joint venture with the Greek Alpha Bank has been concluded, launching Nexi Payments Greece, a new business for the administration of digital payments on the Greek market. Next (BIT:NEXII).

According to CEO Paolo Bertoluzzo, the company would invest more than $100 million in Greece over the next five years.

Final Remarks

It is true that a potential recession would result in a decrease in demand for oil, however the issue is interesting when looking at a quarterly time horizon.

Due to decreased investments in previous years that prevented them from meeting production goals, many countries have demonstrated that they do not honour their production promises. The upcoming storm season is expected to be extremely intense and will likely cause multiple production plant shutdowns.

The supply of crude oil due to Russian oil restrictions is still low, and as Libya's political situation deteriorates, exports of crude oil to the Gulf of Sirte are at risk.

This might soon result in a rise in oil prices that can be profited from.

The market constantly exaggerates, either upwards or negatively, for natural gas.

An enormous domestic surplus has been produced as a result of the situation in Freeport, one of the biggest export operations, which will be out of commission until September owing to an accident. Prices have been therefore driven down.

(Source: Edit and report by: The Decision Maker – Banking & Finance editors)


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