If the 1.0% monthly jump materialises this Friday, it would likely force a massive repricing in the interest rate swap markets, which are currently (and naively) pricing in a less than 10% chance of further Fed hikes.<\/p>\n
While the U.S. feels the pain at the gas pump, Europe and Asia are much more vulnerable. Both regions are heavy net energy importers. Asia already faces the risk of physical shortages, not just higher prices. Europe, still carrying elevated public debt from the pandemic and prior energy crisis, has far less fiscal room to cushion households and businesses. Higher borrowing costs from any renewed rate-hike cycle would hit debt-laden economies especially hard.<\/p>\n
Where to Turn?<\/p>\n
\u2018In this environment, buying the dip in equities is a risky game\u2019, argues Kar Yong Ang, adding that higher input would squeeze corporate profit margins, while central banks will maintain a hawkish stance to curb inflationary pressures. The euro may enjoy a short-term lift if the European Central Bank (ECB) is forced to sound more hawkish than the Fed, but longer-term structural challenges in the Eurozone remain unresolved. While speculating on oil futures carries substantial risk, a mean-reversion strategy\u2014specifically fading parabolic price spikes\u2014can be a logically sound approach for capturing swift, short-term profits. However, history shows that in times of geopolitical chaos, gold and precious metals are the safest place to be.<\/p>\n
The inflation shock is here, and long-term protection over short-term gains should be the priority for every smart trader.<\/p>\n
Disclaimer: This article does not contain or constitute investment advice or recommendations and does not consider your investment objectives, financial situation, or needs. Any actions taken based on this content are at your sole discretion and risk\u2014Elev8 does not accept any liability for any resulting losses or consequences.<\/p>\n","protected":false},"excerpt":{"rendered":"If the 1.0% monthly jump materialises this Friday, it would likely force a massive repricing in the interest…\n","protected":false},"author":2,"featured_media":592575,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[61223,45,49,48,17679,46,102843,44979,146062,4740,63605,61226],"class_list":{"0":"post-592574","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-brent-oil","9":"tag-business","10":"tag-ca","11":"tag-canada","12":"tag-commodities","13":"tag-economy","14":"tag-eur-usd","15":"tag-forex","16":"tag-ignore","17":"tag-natural-gas","18":"tag-weekly","19":"tag-wti-crude-oil"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/592574","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=592574"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/592574\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/592575"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=592574"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=592574"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=592574"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}