April 22, 2024
United States:
US Dollar’s Extended Reign Delivers Stark Wake-Up Call for Markets
The world’s financial markets are encountering a force they didn’t bet on for 2024: A strong dollar is back and looks set to stay.
Having entered the year predicting the greenback would decline, investors have been forced into a rethink by a red-hot US economy and sticky inflation requiring the Federal Reserve to hold off cutting interest rates.
Europe:
ECB’s Villeroy Says Oil Uncertainty Won’t Stop June Rate Cut
The European Central Bank won’t be swayed from a first interest-rate cut in June by oil price uncertainty, Governing Council member Francois Villeroy de Galhau said.
According to the Bank of France governor, even if conflict in the Middle East did push up oil costs, policymakers would have to first analyze if such a shock fueled underlying prices and inflation expectations. That means there’s no “mechanical” reaction, he said in an interview with Les Echos published Sunday.
Asia:
Inflation Mindset Taking Root in Japan Boosts Case for BOJ Hikes
Higher inflationary expectations and price tolerance are taking root in Japan, a development that supports the central bank’s moves to normalize policy and raise interest rates further.
A recent survey by Tsutomu Watanabe, a leading inflation expert in the nation, found that Japanese consumers’ tolerance of price changes is holding up and is higher than levels seen among shoppers in some other major economies. The survey showed for the third-year running that more than half of respondents would continue to buy a product at the same supermarket even if prices rose by 10%.
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