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APRIL 5, 2023

U.S. JOBS OPENINGS SEE STEEPEST DROP

According to the latest report from the Job Openings and Labor Turnover Survey (JOLTS), there has been a significant drop in the number of job openings in the U.S. – the lowest point in almost two years for the month of February. Specifically, there were 1.7 job openings for every unemployed person, down from 1.9 in January.
Subsequently, investors predict that the Federal Reserve will stop raising interest rates very soon. The chances of the Fed not making any moves on interest rates after their May 2-3 meeting has increased to about 60%. This represents a notable increase from the previous day’s prediction of a 43% chance based on the interest-rate futures.

FED PRESIDENT URGES INTEREST RATES RISE TO COMBAT INFLATION

Although expectations of interest rates rise have decreased after JOLTS’s report, the President of the Federal Reserve Bank of Cleveland, Loretta Mester, has suggested policymakers rise the benchmark interest rate to over 5%, in order to tackle inflation. She emphasized the importance of keeping the rate at a high level for a while to achieve a steady decrease in inflation until it reaches 2%. Furthermore, she expressed that the exact interest rate will depend on how quickly price pressures decrease.

GOLD PRICES REACH 13-MONTH HIGH

Due to the decrease in U.S. job openings, gold prices have reached their highest point in 13 months after they reached $2,000 per ounce for the first time since March 2022. As a result, gold has proven to be a non-interest-bearing asset that tends to perform better when the economy is slowing down. Consequently, spot gold prices rose by 1.8%, peaking at $2,022.56 per ounce, with investors anticipating further growth as it approaches its all-time high of $2,075.47, which occurred in August 2020.

UBS’S SUCCESSFUL TAKEOVER MARKS A MILESTONE FOR THE GLOBAL FINANCE INDUSTRY

The leadership of UBS has emphasized that the successful takeover of the Credit Suisse Group is a considerable milestone for both Switzerland and the global finance industry. The groundwork for this takeover had been in the works for years, with feasibility studies dating back to at least 2020. Earlier this year, when large sums of money were being withdrawn from Credit Suisse, Colm Kelleher, UBS’s chairman assembled a small group of respected advisors from Morgan Stanley to engage in contingency planning. This was a confidential project only known by a tight circle of UBS executives and senior mergers, and Morgan Stanley financial services colleagues.

NEW ZEALAND HIKES INTEREST RATES

The Reserve Bank of New Zealand has raised its interest rates to 5.25%, the highest it has been in 14 years. The bank stated that inflation was still too high and that they may consider further tightening. This high rise came unexpectedly and it lifted New Zealand’s currency, the Kiwi dollar.

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