In today’s briefing:
- Ukraine Has Lost the Initiative – 3 Key Predictions on What’s Next
- 5 Things We Watch: Cyclical Upswing, Energy Inv., BOJ Governor, Higher for Longer, the Consumer
- UK: Strikes Dent Dec-22 GDP
- CX Daily: China’s Slumping Office Rental Market Faces a Steep Climb in 2023
Ukraine Has Lost the Initiative – 3 Key Predictions on What’s Next
- The Russian Army has succesfully regrouped and used the recent mobilization drive to reinforce and rest key units who are now ready for offensive operations.
- The Russians are able to dictate where and when major battles occur – which translates to them having taken back the initiative.
- The Ukrainians are now reacting rather than acting. They are, however, doing a pretty fine job at reacting.
5 Things We Watch: Cyclical Upswing, Energy Inv., BOJ Governor, Higher for Longer, the Consumer
- Amamiya is perceived to be Kurodas lieutenant or internal architect, which will dampen hopes/bets on changes to YCC-control initially. Stay long JPY (but refrain from bets in JGBs for now).
- Lower energy-prices and improving sentiment may be enough to reignite the actual production pace in Q1/Q2 relative to expectations.
- Savings are slowly but surely evaporating, but on most recent trends, they are likely to hold up a while longer.
UK: Strikes Dent Dec-22 GDP
- UK GDP ended 2022 on a low as widespread strikes made a deeper-than-expected dent in service sector output. GDP’s 0.5% m-o-m fall flattened Q4 to zero growth.
- Zero isn’t negative, so a recession is technically avoided by the thinnest of margins that could revise away. GDP was still essentially flat in 2022 and should fall in 2023.
- The BoE needs a recession to write off excess demand. Lost output from strikes over inflation-busting pay rises does not help second-round effects and underlying inflation.
CX Daily: China’s Slumping Office Rental Market Faces a Steep Climb in 2023
In Depth: China’s slumping office rental market faces a steep climb in 2023
Blinken’s planned visit to Beijing was ‘ill-timed’ given U.S. actions against China, diplomat says
Global gold demand soars in 2022 amid search for safe havens
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