May 25, 2023
United States:
Fed Traders Are Fully Pricing In Another Rate Hike Once Again
Traders are now fully pricing in another quarter-point interest rate increase by the Federal Reserve within the next two policy meetings and a more than one-in-two chance that it could be as soon as next month.
The shift came as US rates rose across the board, led by the front end, fueled by increased optimism about a potential deal on the debt ceiling and economic data.
Europe:
Europe’s Banks Say They’re Back. So Why Doesn’t Anyone Buy Their Shares?
PacWest Bancorp lost $1 billion in one quarter, saw its stock drop 89% in two months, and has been selling assets to shore up confidence. Deutsche Bank AG just had its most profitable 12 months since 2007.
PacWest’s stock still trades at the higher premium of the two.
Asia:
China Warnings Flash Across Global Markets as Growth Disappoints
China’s muted economic rebound and Beijing’s reluctance to deploy large-scale stimulus are reverberating around the globe, crushing commodity prices and weakening equity markets.
Investors are pegging back their expectations for the world’s second-biggest economy as worries mount that its recovery from pandemic restrictions has lost momentum.
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