Global Market- US Balance sheet & Economic data indicates weakness
This week we will focus on US Fed meeting minutes, US Jobless claim and China’s attempt to boost economy which has been hit by zero COVID policy and stringent lockdown. Recent rally in global market is purely supported by narrative that US Fed will slowdown rate hike and likely to pause see impact of steepest rate hike in recent US history.
US Fed – Balance sheet @ $ 8.62 trillion Vs peak of $ 8.96 trillion.
• US Fed balance sheet was at $ 8.96 trillion in March 2022 which is currently at $ 8.62 trillion.
• Currently US Fed QT is at $95 billion per month and is expected to continue till Mid 2023.
China Central Bank Boosts Stimulus To Aid Covid-Hit Economy
The People’s Bank of China reduced the reserve requirement ratio for most banks by 25 basis points, it said in a statement Friday. The adjustment takes effect on Dec. 5 and will inject 500 billion yuan ($70 billion) of liquidity into the economy.
Equichain Wealth Advisors: Market View & Opinion
Current global narrative of soft monitory policy due to economic slowdown in US or economic crisis in Europe or economic impact in China due to zero COVID policy, all this indicate the return of easy monitory policy globally. So, we repeat our view and statement for 3rd week straight that we see December 2022 as repeat of August 2007.
Recent development seen this week have turned our view bullish and high probability of repeat of August 2007 – January 2008 phase which witness sharp rally in global assets class with risk-on sentiment.