US stock indexes collapsed after a sharp rise in the discount rate

After the Fed's largest discount rate since 0.75% since 1994, major US stock indexes fell 2-4% on June 16. Thus, the Dow Jones index fell by 741.46 points or 2.42% to 29,927.07 points, the S&P 500 - by 123.22 points or 3.25% to 3666.77 points, Nasdaq - by 453 , 06 items or 4.08% to 10,646.10 items

The collapse of stock and cryptocurrency markets is forcing investors to invest in commodity assets, leading to rising oil and agricultural prices. Therefore, yesterday futures for WTI oil rose by $ 2.01 / barrel or 1.74% to $ 117.32 / barrel, for Brent oil - by 0.7% to $ 119.28 / barrel, July futures for corn - by 1.8% to $ 310.2 / t, for wheat - by 2.8% to $ 388 / t, for soy - by 1% to $ 625 / t.

Investors understand that the shortage of Russian oil and Ukrainian grain will persist until the end of the war in Ukraine, and any decline in oil prices will be temporary, as China will soon restore demand for oil, which fell amid lockouts.

The stock markets of Western Europe yesterday grew steadily on the information about the extraordinary meeting of the leadership of the European Central Bank (ECB) held on Wednesday. The consolidated index of the largest companies in the region Stoxx Europe 600 yesterday rose by 1.42% to 413.1 points, the German DAX - by 1.36%, the French CAC 40 - by 1.35%, the British FTSE 100 - by 1.2%, Spanish IBEX 35 - by 1.34%, Italian FTSE MIB - by 2.87%.

The ECB has pledged a flexible approach to reinvesting securities proceeds under the Pandemic Emergency Purchase Program (PEPP) to ensure the functioning of the monetary policy transmission mechanism, which is a key condition for maintaining price stability in the euro area. In addition, the ECB plans to accelerate the creation of a new instrument to limit fragmentation in the region, which will help reduce disparities in the cost of loans in different eurozone countries.

Last week, the ECB left key interest rates unchanged, but planned to raise them by 25 basis points in July. The euro against the dollar strengthened from 1.04 to 1.0525 $ / €.

Grain and oilseed markets are affected by the slowdown in the world economy, uncertainty about exports from Ukraine and restrictions on supplies from Russia. However, the strengthening of monetary policy by global central banks will lead to a recession in the world economy, lower demand for energy and, consequently, grain.