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Global Market – Soft landing of US Economy likely

This week, we will discuss the outcome of all 3 central bank ‘s and their comment on future guidance. We will also discuss US Jobs data. We see central bank ‘s and market are preparing in for soft landing. Central banks continues its monitory tightening policy while key data continue to remain mix with last quarter US GDP data came at 2.90% growth.

We believe base on recent events, economic data and commentary by US Fed, BOE & ECB indicate the high chance of soft landing. We continue to believe that 2023 will repeat August 2007 – January 2008 phase which has witness sharp rally once there is pivot or pause by US Fed.

Global Market- Soft landing of US Economy likely

This week, we will discuss the outcome of all 3 central bank ‘s and their comment on future guidance.  We will also discuss US Jobs data.  We see central bank ‘s and market are preparing in for soft landing.  Central banks continues its monitory tightening policy while key data continue to remain mix with last quarter US GDP data came at 2.90% growth.

US Fed meeting outcome on 1-Feb-23

• US Fed raises rates by 25-bps to 4.50% – 4.75%.
• US Fed chair Jerome Powell: couple more rate hikes expected.
• Fed futures still sees price cut this year, median forecast for 2023 @ 4.486%.

US Economic data – this week

• ADP non-farm employment change: Actual @ 106k Vs estimate @ 176k, weak data
• ISM manufacturing PMI: Actual @ 47.4 Vs estimate @ 48, weak data.
• JOLTS Jobs openings: Actual @ 11.01 M Vs estimate @ 10.28M, strong data.
• Average hourly earnings: Actual @ 0.3% Vs estimate @ 0.30%, in-line with estimate.
• Non-farm employment change: Actual @ 517k Vs estimate @ 196k, very strong data.
• Unemployment change: Actual @ 3.4% Vs estimate @ 3.6%, very strong data.
• ISM Services PMI: Actual @ 55.2 Vs estimate @ 50.50, strong data.

Equichain Wealth Advisors: Market View & Opinion

This week was very busy as there were 3 key central banks, most of the meeting outcome was in-line with market expectation and commentary was also in-line with expectation.  Some US economic data were soft where as some economic data came in strong.  

Soft landing: inflation to cool-off with very minimum economic pain.  Recession could be mild without any major impact of jobs, economic and corporate earnings.

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