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On April 3, the Reserve Bank of Australias latest report for the banking industry warned that continued uncertainty in US trade policy "could have a chilling effect on business investment and household spending decisions, and pose a significant headwind to the outlook for global economic activity and inflation." The Reserve Bank of Australia said there was also considerable uncertainty about the impact of possible changes in fiscal, regulatory and other government policies on global growth and inflation.The Hang Seng Index in Hong Kong opened on April 3 (Thursday) down 564.32 points, or 2.43%, to 22,638.21 points; the Hang Seng Technology Index opened on April 3 (Thursday) down 168.53 points, or 3.11%, to 5,257.91 points; the CSI 300 Index opened on April 3 (Thursday) down 219.05 points, or 2.57%, to 8,312.46 points; the H-share Index opened on April 3 (Thursday) down 61.24 points, or 1.59%, to 3,800.76 points.USD/CNY reported 7.1889, up 96 points (RMB depreciation); EUR/CNY reported 7.8414, up 588 points; HKD/CNY reported 0.92353, up 8.6 points; GBP/CNY reported 9.3903, up 740 points; AUD/CNY reported 4.5185, down 188 points; CAD/CNY reported 5.0650, up 142 points; JPY/CNY reported 4.8767, up 543 points; RMB/RUB reported 11.6222, down 103 points; NZD/CNY reported 4.1367, up 77 points; RMB/RMB reported 0.61947, up 27.1 points; CHF/CNY reported 8.1915, up 424 points; SGD/CNY reported 5.3478, down 143 points.Hang Seng Index futures opened down 2.64% at 22,600 points, 624 points below the water level.On April 3, James Surowiecki, a famous financial journalist, wrote that he had just figured out where these false tariff rates in the United States came from. They dont actually calculate tariff rates + non-tariff barriers as they say. Instead, for each country, they just divide the US trade deficit with that country by the countrys exports to the United States. So the United States has a $17.9 billion trade deficit with Indonesia, and its exports to the United States are $28 billion, $17.9/$28 = 64% (the United States imposes a 32% reciprocal tariff on Indonesia), and Trump claims that this is the tariff rate imposed by Indonesia on the United States. What a ridiculous thing. Netizens found that similar calculations apply to the European Union and Vietnam.

GBP/USD perceives barriers below 1.1980 as Fed hawks strengthen risk-averse sentiment

Daniel Rogers

Nov 29, 2022 15:13

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The GBP/USD pair has faced selling pressure around 1.1976 during the Tokyo session. The brief Cable recovery from the 1.1940 support level has terminated as hawkish remarks from Federal Reserve (Fed) policymakers have strengthened the risk aversion theme.

 

The US Dollar Index (DXY) has resumed its advance after a retracement to approximately 106.60. Futures on the S&P500 have rebounded marginally during the Asian session, although a reversal is still quite distant. In the interim, rates on 10-year US Treasury securities have rebounded to approximately 3.69 percent.

 

As investors feel the slowing in the interest rate hike is not indicative of a suspension in policy tightening, US Treasury bonds have regained its alpha. Policymakers at the Federal Reserve (Fed) expended much effort to reach an inflation rate of 2%, yet the headline inflation rate in the United States is 7.7%.

 

Thomas Barkin, president of the Richmond Fed Bank, remarked on Monday, as reported by Reuters, that he favors fewer future interest rate hikes as the central bank works to decrease overly high inflation.

 

According to Financial Times, Loretta Mester, president of the Cleveland Fed Bank, believes the Federal Reserve is not close to stopping its rate hikes. She highlighted that additional favorable inflation statistics and indications of moderation are required prior to establishing a plan to halt rate hikes.

 

In the future, the US Gross Domestic Product (GDP) numbers will be closely scrutinized. The third quarter GDP estimate is anticipated to remain unchanged at 2.6%. As the Fed is devoted to achieving price stability, it is strongly recommended to reduce the growth rate. A period of rising growth rates will continue to keep inflation in check, as a robust GDP indicates robust demand from individuals, which does not translate to a decline in price rise.

 

Economists at Danske Bank have concluded that the United Kingdom has officially entered a recession. Expectations are for four consecutive quarters of negative GDP growth, with growth not resuming until the fourth quarter of CY2023.


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