April 19, 2023
United States:
US Stock Bulls Ignore 100 Years of Recessions at Their Peril
The chorus of stock bulls predicting US equities will weather a recession has got it wrong, if history is any guide.
Optimists say stocks hit this cycle’s low in 2022 and an economic contraction this year or in early 2024 would only dent the rebound. The market backs them up: The S&P 500 Index has gained more than 8% so far this year, quickly reversing the slump after Silicon Vally Bank’s failure in March.
Europe:
Traders Bet on 5% BOE Peak Rate as Inflation Fears Resurface
Traders ramped up bets on further interest-rate hikes from the Bank of England after UK inflation unexpectedly remained in double digits, a wake-up call for investors who thought the tightening cycle was close to over.
Data showed consumer prices rose 10.1% in March from a year earlier, driven by the biggest increase in food costs in more than four decades. That follows strong wage growth reported Tuesday, adding to concerns that UK inflation is proving stickier than anticipated.
Asia:
Hong Kong Interbank Liquidity Set to Hit Lowest Since 2008
Hong Kong’s interbank liquidity is falling toward its lowest level since the global financial crisis, following a series of intervention by the city’s de facto central bank to defend the local currency’s peg to the dollar.
The city’s aggregate balance is set to drop to HK$49.2 billion ($6.3 billion) on Thursday when the Hong Kong Monetary Authority settles its earlier purchase of HK$6.9 billion to keep the currency peg intact. The key gauge of interbank liquidity already has shrunk about 90% from its peak in 2021, though the impact on borrowing costs have been muted so far.
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