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World Bank Warns of Stagflation Danger: 5 Key Issues on Wednesday

Published 08/06/2022, 08:40
Updated 08/06/2022, 10:00
© Reuters.
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By Laura Sánchez

Investing.com - Investors are still keeping a close eye on this week, which is packed with important macro data and central bank meetings.

The World Bank has cut its global growth forecast.

Oil prices remain at record highs.

Cryptocurrencies are trading higher this morning.

These are the five factors that investors should take into account when making their decisions today:

1. World Bank warnings

The World Bank on Tuesday cut its global growth forecast by 1.2 percentage points to 2.9% by 2022, warning that Russia's invasion of Ukraine had compounded the damage from the COVID-19 pandemic, with many countries likely to face a recession.

World Bank president David Malpass said global growth was being hit by war, COVID-19 confinements in China, supply chain disruptions, and the risk of stagflation; a period of lean expansion and high prices last seen in the 1970s.

"The danger of stagflation is considerable today," Malpass wrote in the foreword to the report, according to Reuters.

2. GDP in the Euro Zone

This Wednesday, at 07:00 a.m. ET (1100 GMT), the Gross Domestic Product (GDP) data for the Eurozone is to be posted. An increase of 5.1% is expected in the previous month, which would give evidence of consolidation in growth.

3. Crypto on the rise

The cryptocurrency sector today is trying to recover from yesterday's losses on news of the investigation of Binance by the US Securities and Exchange Commission (SEC). Bitcoin is trading at $30,000 and Ethereum at $1,700.

4. Asia and the U.S. stock market

Positive signs today in the main Asian indices. Nikkei is up 0.9%. Hong Kong's Hang Seng is up 1.9% and the Shanghai Composite is up 0.1%.

On Wall Street, the market also ended yesterday in the green. The S&P 500 (0.4%), Nasdaq (0.9%) and Dow Jones (0.8%) closed higher.

5. Macroeconomic data

The main macroeconomic releases in Europe include France's exports, imports and trade balance, Italy's retail sales, and employment in the Euro Zone.

In the U.S. we will see wholesale inventories and crude oil inventories from the IEA.

Follow the day's events on our economic calendar: https://uk.investing.com/economic-calendar/

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