Investors are buying risky assets again
2022.12.01 00:45
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Investors are buying risky assets again
Budrigannews.com – Investors have rediscovered their risk appetite as a result of Jerome Powell’s hint of a Fed pivot and optimism regarding China’s reopening prospects, driving the safe-haven U.S. dollar lower.
All it took was for Fed Chair Powell to suggest that the central bank might slow the rate at which it raises interest rates when it meets again in two weeks, without delivering any new hawkish hints.
“As we approach the level of restraint that will be sufficient to bring inflation down,” Powell stated, “it makes sense to moderate the pace of our rate increases.”
Is it done?
Markets are proceeding despite the possibility that this is incorrect.
European futures predict that regional stock prices will soar, following Asian equities and Wall Street.While U.S. Treasuries are rising, the dollar is still falling.
Signs that China was softening its stance on COVID-19 restrictions, such as the lifting of district lockdowns in a number of the world’s second-largest cities despite an increase in cases, also helped investor sentiment.
China’s factory activity, which decreased in November, and the possibility of a lengthy and muddled exit from COVID controls seem to have little effect on the market.Asia’s factory output has been impacted by China’s lockdowns and slowing demand.
Asahi Noguchi, a board member, stated in a speech to business leaders that the Bank of Japan, which is the sole “dove” among major central banks, will aim to keep interest rates extremely low until wage growth gets a boost.
The BOJ must patiently maintain its current monetary easing in order to encourage wage growth.”
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