| Analyst sees a 98% chance of global recession. Putin grants Edward Snowden Russian citizenship. China's yuan approaches a 14-year low. Here's what you need to know today. Wall Street daredevils beware: Bearish sentiment is far from exhausted. The S&P 500 just sank to the lowest since December 2020, bringing this month's losses to nearly 8%, as the pound weakened to records, while commodities buckled under the weight of the dollar. US Treasury yields surged, with poor demand for a two-year note auction sending the 10-year rate up by the most since the March 2020 Covid crash. In China, the yuan is approaching the lowest level in 14 years. The People's Bank of China has already stepped up its currency defense, but that did little to stop the depreciation. To cap it all, Ned Davis Research now sees a 98% chance of a global recession. Apple began making its new iPhone 14 in India sooner than anticipated, after a surprisingly smooth production rollout. The US tech giant, working with Foxconn, has long made most of its iPhones in China. But it's been seeking alternatives as Xi Jinping's administration clashes with the US government and Covid lockdowns disrupt economic activity. At the same time, Narendra Modi's administration is keen to make the country into a viable competitor to China in technology and production capability.  | President Vladimir Putin has granted citizenship to Edward Snowden. The former National Security Agency contractor who disclosed a top-secret spying program and has been living in Russia since fleeing the US nine years ago. Snowden, 39, is within the age range for Putin's conscription push, but cannot be called up as he didn't serve in the Russian army and isn't a reservist. Meanwhile, Ukraine is asking for more powerful weapons to continue its counteroffensive against Russian forces. But so far there's no sign allies will step up their commitments, particularly since Putin just reasserted his nuclear threats. The US withdrawal from Afghanistan after two decades of war opened up an opportunity for China to expand its influence and lock down access to the country's vast mineral deposits. It hasn't worked out that way. More than a year after US troops left, Afghanistan's economy is collapsing, 19 million people are at risk of acute hunger and investment the Taliban were counting on from Beijing hasn't arrived. Both sides blame the other. For now, the continuing standoff means that Afghanistan's mineral treasures — including deposits of gold, copper and lithium — will remain buried. US hotel operator Standard International is betting on Thailand's post-pandemic tourism recovery to power an expansion in Asia. The company, majority-owned by Thai developer Sansiri Pcl, will open boutique hotels under its flagship brand "The Standard" in Pattaya and popular tourist island Phuket by 2025. It unveiled a property in Bangkok in July this year. The company plans to open more branded hotels in Singapore and Melbourne next year, with a further eight lined up for Europe and North America. No wonder everything sold off on Monday. The markets look to have finally woken up to the idea that the Federal Reserve is out of the "put" business. Eurodollar futures erased bets on interest-rate cuts in 2023, just over three months after growing fears of a global slowdown spurred them to start pricing in rapid easing next year. Given that economic alarm bells keep ringing louder and louder, the combination of an almost-certain recession and a central bank determined to keep rates higher for longer is toxic for all assets. The UK government's determination to cut taxes added fuel to the flames, but the prime mover for this year's rout in stocks and bonds remains both the post-pandemic inflation surge and the rapid acceleration of rate hikes after the Fed and other central banks belatedly woke up to the extreme need to stamp out demand. The eurodollar market is now telling investors to wait until 2024 for relief from monetary tightening. That's looking like a long, hard wait. Garfield Reynolds is Chief Rates Correspondent for Bloomberg News in Asia, based in Sydney. | 
No comments:
Post a Comment