In today’s briefing:
- Powell Press Conference: Persistent and Painful
- ECB: More Ground to Cover Over Months
- CX Daily: Chinese Firms Flock to Saudi Arabia in Middle East Gold Rush
- CX Daily: Why Time Banks Haven’t Caught On in China
Powell Press Conference: Persistent and Painful
- The Federal Reserve raised interest rates by another 25 basis points, expecting inflation to come down ‘not so quickly.’
- Powell feeds the overly-enthusiastic market narrative by betting against history, anticipating that the current Fed tightening cycle will not significantly push up the US unemployment rate.
- Powell and the Fed dodged accountability back in February, and the PacWest collapse hours after stating banking ‘conditions have broadly improved’ is very painful and disturbing.
ECB: More Ground to Cover Over Months
- The ECB raised its policy rates by 25bps in May, as we expected. A 50bp step was resisted, but APP reinvestment will end. The ECB sees more ground to cover.
- Emphasis on the plural of decisions signals an intent to hike more than once more, depending on the data. We still expect 25bp deposit rate hikes in June and July.
- Monetary policy is now deemed restrictive, implying a neutral rate with a 2-handle. Demand is being deferred to a time when it may discourage future cuts.
CX Daily: Chinese Firms Flock to Saudi Arabia in Middle East Gold Rush
In Depth: Chinese firms flock to Saudi Arabia in Middle East gold rush
Trending in China: About two dozen women accuse prominent screenwriter of sexual harassment
China’s factory activity contracts amid weak demand, Caixin PMI shows
CX Daily: Why Time Banks Haven’t Caught On in China
Time banks / In Depth: Why time banks haven’t caught on in China
Digital banks / Top Chinese digital banks report more bad loans but higher earnings
Banking / In Depth: China’s banks look to bolster bottom line after lending binge
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