Global Market - U.S. debt ceiling & reginal banking crisis

Global Market – U.S. debt ceiling & reginal banking crisis

This week we will focus on U.S. debt ceiling limit, crisis at regional banks as deposit continues to flees small and regional banks move towards treasury and big banks. We will also discuss BOE action this week and China’s economy showing slow pace of economic recovery.

So, now the again focus will shift to 1) Soft landing or Hard landing, 2) Is Recession or economic weakness good for market – because it will make way for lower interest rate & 3) Will U.S. allow to default or will take steps and increase debt limit at last movement. We do believe, it is time to remain cautious as economic uncertainty & policy paralysis is seen in U.S.

Global Market – U.S. debt ceiling limit & regional banking crisis

U.S. debt ceiling limit at $3.4 trillion

U.S. national debt surpassed $31 trillion for the first time October 2022, according to the Treasury Department. A whopping $8 trillion were added since the start of the coronavirus pandemic in early 2020.

In a letter to Treasury Secretary Janet Yellen, current and former leaders of the Treasury Borrowing Advisory Committee said the costs of the current standoff extend beyond markets to the time that financial firms are having to spend preparing for a possible default.

BOE Raises Key Rate To 4.5%

The UK central bank lifted its key rate a quarter point as expected to 4.5%, with two of the nine-member Monetary Policy Committee voting for no change.

China’s Weak Inflation, Borrowing Show Economic Recovery Waning

Consumer inflation weakened to a two-year low of 0.1% in April, the National Bureau of Statistics said Thursday, as food and energy costs eased.

PacWest deposits fell 9.5% or $1.5 billion last week – U.S. regional banking crisis

Shares of PacWest Bancorp (PACW.O) plunged 23% on Thursday, 11-May-23 after the Los-Angeles-based lender said its deposits declined and that it had posted more collateral to the U.S. Federal Reserve to boost its liquidity.

Equichain Wealth Advisors: Market View & Opinion

U.S. banking crisis or debt ceiling limit problem is yet to have any significant impact on financial market. Although sentiment remain weak, global asset class continue to trade in narrow range.

It is surprising to many experts and market participants that, how all global stocks market continue to trade near its recent highs. We would prefer balancing approach and would prefer to increase cash level in cash of any major correction due to unforeseen reason which we have discussed today and any other reason which could surprise global market.

Click on the attachment to read the full report:

Global Market – U.S. debt ceiling limit & regional banking crisis.pdf