12th October 2022 Market Updates
FPG Fortune Prime Global Overnight headlines
Overnight headlines
The International Monetary Fund issued a warning about an unruly market revaluation, claiming that the risks to global financial stability have increased, increasing the likelihood of market contagion and stress spillovers.
The probability of a severe downturn has increased to levels not seen since the start of the COVID-19 pandemic, according to the IMF, as a result of prolonged inflation, a slowdown in China, and ongoing strains from Russia’s invasion of Ukraine.
Tobias Adrian, director of the IMF’s Monetary and Capital Markets Department, stated that it was difficult to recall a time when uncertainty was so high. “We haven’t seen this much conflict in the world in decades, and inflation is at an all-time high.”
The IMF has once more criticised the mini-budget put forth by the UK government, claiming that it “is not going to work very well.” The Fund stated that in order to make sure his “fiscal package is going to be consistent with what the Bank of England is trying to accomplish,” Chancellor Kwasi Kwarteng must reveal savings intentions in the coming weeks.
The current British fiscal strategy has been characterised by Pierre-Olivier Gourinchas, the IMF’s economic adviser, as “two persons trying to hold the steering wheel” and guide the automobile in different directions. It won’t work out very well, he remarked.
Thomas Jordan, the president of the Swiss National Bank, suggested that if pricing pressures start to intensify in the economy, interest rates should increase once more.
He stated in Washington that “financial conditions should now be tightened with a clear focus on bringing inflation back to target” and cautioned his colleagues against developing a “underlying expansionary bias” and the “political convenience” of looser monetary policy.
According to the Federal Reserve Bank of New York’s most recent survey, consumers believe that US inflation would moderately decline over the coming year but are less enthusiastic about the long run.
The regional Fed bank reported that the median inflation estimates for the next year dropped to 5.44 percent in September, from 5.75 percent in the previous month and the lowest level in a year. They anticipate price increases of 2.91 percent in three years, up from 2.76 percent in August. Views on inflation for the next five years also improved.
Market movements
- 85 at AUD -0.3%
- Bitcoin dropped 1.2% to US$18,993
- Dow +0.5% S&P 500 +0.4% Nasdaq fell 0.8%
- Gold is now $1673.03 per ounce, up 0.3%.
- Brent crude fell 2.1% to $US94.14 per barrel.
- Iron ore fell by 1.7% at US$97.05 per tonne.
Today’s agenda
ABS data: Second release of the 2021 Census.
Mark Dreyfus, federal attorney general, will speak at the National Press Club.
Monthly UK GDP.
