{"id":162503,"date":"2023-07-07T08:00:00","date_gmt":"2023-07-07T00:00:00","guid":{"rendered":"https:\/\/www.mediaintel.asia\/?p=920978"},"modified":"2023-07-07T08:00:00","modified_gmt":"2023-07-07T00:00:00","slug":"mind-the-curve-world-market-themes-for-the-week-ahead","status":"publish","type":"post","link":"https:\/\/www.chinalegalblog.com\/en\/2023\/07\/07\/mind-the-curve-world-market-themes-for-the-week-ahead\/","title":{"rendered":"Mind the curve: World market themes for the week ahead"},"content":{"rendered":"
\"MediaIntel.Asia\"<\/a><\/div>\n

Trade tensions between Washington and Beijing are riding high while U.S. inflation data will inform the Federal Reserve\u2019s next move and rate setters in New Zealand and Canada meet.
\nHere\u2019s a look at the week ahead in markets:
\nUNDER PRESSURE
\nOpen this photo in gallery: Federal Reserve Chair Jerome Powell attends a news conference following a Federal Open Market Committee meeting, Wednesday, June 14.Jacquelyn Martin\/The Associated Press
\nMarkets have come around fast to the Fed\u2019s view that instead of being cut anytime soon, rates will remain high for longer. After another brutal bond sell off, focus turns to Wednesday\u2019s U.S. inflation data. Price pressures have been easing but perhaps not fast enough with a July rate hike seen as likely.
\nMay CPI data showed the smallest year-on-year increase since March 2021 - but at 4%, that was still well above the Fed\u2019s 2% target. Just like the latest personal consumption expenditures index showed similarly slowing inflation also above the Fed \u2018s comfort zone.
\nJune meeting minutes showed a united Fed agreed to hold rates steady, buy time and assess whether further hikes would be needed. The answer seems yes. And the most deeply inverted bond yield curve since the 1980s suggests investors bracing for another hike also expect Fed tightening raises recession risks.
\nFIGHTING FIRES
\nOpen this photo in gallery: U.S. Treasury Secretary Janet Yellen arrives at Beijing Capital International Airport in Beijing on July 6.PEDRO PARDO\/AFP\/Getty Images
\nChina is fighting a hi-tech trade war with Washington while grappling with a sputtering economy.
\nAfter months of tightening of restrictions by the U.S. and key allies on chip-related imports, Beijing hit back in recent days with curbs on chip-making metal exports, and a warning of more to come - just in time for Treasury Secretary Janet Yellen\u2019s visit. Washington has been mulling curbing Chinese companies\u2019 access to cloud-computing services.
\nThings aren\u2019t looking bright on the economic front either. Monday\u2019s inflation data should show more deflationary pressure at factories and retailers, while Thursday\u2019s trade numbers are expected to see a continued decline in exports - all pointing to lacklustre demand.
\nHopes for major Politburo policy support at month-end seem to have faded. Goldman Sachs said that conversations with their local clients showed they now expected to see measures aimed only at easing economic headwinds, rather than generating strong growth.
\nPAUSE AND EFFECT
\nOpen this photo in gallery: Two people walk towards the entrance of the Reserve Bank of New Zealand located in the New Zealand capital city of Wellington, March 22, 2016Rebecca Howard\/Reuters
\nSkips, pauses and pivots dominate monetary policy conversations as persistent inflation has seemingly consigned central-bank forward guidance to the dustbin of history. Increasingly, policymakers say decisions depend on future data, making it harder for traders to formulate a view on the outlook.
\nThe Reserve Bank of New Zealand (RBNZ) - one of the first major central banks to start tightening policy - has raised rates by 525 basis points since October 2021 - the most among the G10. In May, it signalled it had finished raising rates, but at its meeting on Wednesday longer-term clarity may remain out of reach with inflation running at 6.7% and the economy in recession.
\nThe Bank of Canada, meeting the same day, is in the data-dependent corner, leaving markets split down the middle on whether it will raise or pause.
\nBANK EARNINGS
\nOpen this photo in gallery: People walk past a Citibank branch in New York August 21, 2012.Brendan McDermid\/Reuters
\nU.S. banking giants sailed through the Fed\u2019s annual health check in late June, highlighting they have enough capital to weather a severe economic downturn.
\nBut now it\u2019s time for earnings, with JPMorgan Chase, Citigroup and Wells Fargo all scheduled to report second quarter earnings on July 14.
\nThe picture looks not so rosy with results predicted to be weighed down by sluggish dealmaking and trading revenue while a dearth of investment-banking activity has prompted banks to lay off thousands of employees.
\nMeanwhile, the largest U.S. lenders are expected to keep tightening credit standards given the uncertain economic environment, particularly after bank failures earlier this year. Analysts focus on banks\u2019 lending outlook and how much they set aside in rainy-day funds to cushion losses from souring loans.
\nTROUBLE IN CREDIT LAND
\nOpen this photo in gallery: This photograph shows the logo of Casino on a supermarket trolley close to a Casino shop in Ploubalay, western France on July 5.DAMIEN MEYER\/AFP\/Getty Images
\nDebt-laden companies are running into trouble.
\nEmbattled French retailer Casino, with 3 billion euros ($3.3 billion) of debt maturing in the next two years, has until end-July to agree a restructuring plan.
\nBritain\u2019s Thames Water, with 14 billion pounds of borrowings, faces temporary state ownership if it can\u2019t raise fresh capital. Sweden\u2019s commercial landlord SBB is fighting for survival.
\nIn the U.S., junk-rated companies have to refinance almost $1.2 trillion of borrowings by 2026, according to S&P Global Ratings. At the same time, the market for collateralised loan obligations - vehicles formed by specialist asset managers that buy about 60% of all junk-rated loans and package them up into bonds - has almost shuddered to a halt.
\nStock market valuations do not reflect any credit-related worries yet - but that may just be the eye of a storm.
\nBe smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.<\/p>\n

This data comes from MediaIntel.Asia's Media Intelligence and Media Monitoring Platform<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Trade tensions between Washington and Beijing are riding high while U.S. inflation data will inform the Federal Reserve\u2019s next move and rate setters in New Zealand and Canada meet.
\nHere\u2019s a look at the week ahead in markets:
\nUNDER PRESSURE
\nOpen this p…<\/p>\n","protected":false},"author":253,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[669,65,692,144,586,88,477,288,785,194,1002,1284,1542],"tags":[2124,6518,4721,3472,2724,7654,4441,2127,10315,3563,7327,10343,10351,10336],"class_list":["post-162503","post","type-post","status-publish","format-standard","hentry","category-bank","category-beijing","category-canada","category-china","category-economy","category-gambling","category-investment","category-medicine","category-new-york","category-news-chinese-law","category-retail","category-stock-market","category-technology","tag-airport","tag-aviation","tag-casino","tag-chinese","tag-exports","tag-france","tag-goldman-sachs","tag-import","tag-media-intelligence","tag-new-zealand","tag-revenue","tag-supermarket","tag-war","tag-washington"],"_links":{"self":[{"href":"https:\/\/www.chinalegalblog.com\/en\/wp-json\/wp\/v2\/posts\/162503"}],"collection":[{"href":"https:\/\/www.chinalegalblog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.chinalegalblog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.chinalegalblog.com\/en\/wp-json\/wp\/v2\/users\/253"}],"replies":[{"embeddable":true,"href":"https:\/\/www.chinalegalblog.com\/en\/wp-json\/wp\/v2\/comments?post=162503"}],"version-history":[{"count":1,"href":"https:\/\/www.chinalegalblog.com\/en\/wp-json\/wp\/v2\/posts\/162503\/revisions"}],"predecessor-version":[{"id":162504,"href":"https:\/\/www.chinalegalblog.com\/en\/wp-json\/wp\/v2\/posts\/162503\/revisions\/162504"}],"wp:attachment":[{"href":"https:\/\/www.chinalegalblog.com\/en\/wp-json\/wp\/v2\/media?parent=162503"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.chinalegalblog.com\/en\/wp-json\/wp\/v2\/categories?post=162503"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.chinalegalblog.com\/en\/wp-json\/wp\/v2\/tags?post=162503"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}