Market overview – August 2022

Major recession or moderate slowdown? · 9 August 2022

Despite inflation concerns, aggressive central bank policies, corporate earnings fears and recession risk, it took a slight improvement from the worst-case scenarios to move financial markets into positive territory.  All central banks have demonstrated their determination to control inflation, even if it leads to a severe recession. They continued to raise their interest rates sharply to slow down the economy. The only exceptions are China, Japan and Russia. China continues to contort with its Zero Covid policy and the fragility of its real estate market. As a result, China's central bank is intensely stimulating its economy to offset the impact of repeated lockdowns. Japan continues, ad-aeternam, to boost its economy at the cost of immense yen weakness. Russia is experiencing the effects of sanctions-related capital controls. 

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