Gas prices surged on Thursday, with the key European benchmark gaining 12% as buyers were unsettled by the mounting threats to Europe’s supply given its high dependence on Russia. That’s just one more headwind to the world economy rattled markets could do without. Key developments that should provide more direction to markets on Friday: – Kuroda rules out the near-term chance of tweaking BOJ’s dovish guidance – Bitcoin eyes record losing streak as ‘stablecoin’ collapse crushes crypto – ECB Vice President Luis de Guindos, ECB board member Isabel Schnabel speak – Minneapolis President Neel Kashkari – Central Banks meet in Mexico, Peru Serbia – University of Michigan sentiment index/ inflation expectations – European earnings: Deutsche Telekom
One underlying reason for the pain there, as well as across risk assets, comes back to worries about high inflation and rising interest rates and whether this will bring a hard landing for the world economy. U.S. Federal Reserve Chair Jerome Powell said Thursday the battle to control inflation would “include some pain,” repeating his expectation of half-percentage-point rate rises at the next two policy meetings. The day ahead is relatively quiet on the data front, perhaps giving investors time to take stock of a wild week. But there’s also the potential for more volatility. In Europe, pressure to secure alternative gas supplies is increasing after Moscow imposed sanctions on European subsidiaries of state-owned Gazprom.