Recession:

Recession: "The Worst is Yet to Come" - IMF Chief Economist

2022-12-29 • Updated

Last week, Pierre-Olivier Gourinchas, the IMF's chief economist, commented on the IMF's global economic outlook, stating clearly that the worst was yet to come. For many people, he opined that the year 2023 would feel like a recession.

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The IMF has also warned of an irregular repricing in markets which has led to the conclusive increase in global financial stability risks, which may spread and spill over into other markets due to the combined pressures from food crises, war-driven energy costs (scarcity), inflation, and higher interest rates, thus, driving the world closer to a global recession.

Outlook for Traders

As of 13th October 2022, world stocks dipped nearly below the 2-year low, with the Japanese yen slipping even lower to the 1998 lows. OPEC has decided to cut down on oil production, which could raise oil prices to new highs, hastening a possible global recession.

What to Trade

In times like these, more investors and commercial banks will be leaning towards safe-haven commodities in hopes of capital preservation rather than growth. Thus, there could be more bullish movements on assets like XAUUSD and OIL.

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All eyes are on XAUUSD for a possible breakout and retest of the descending channel which should signal the start of a bullish rally.

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Can the CPI Release Reverse The USD? 
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The upcoming August inflation data may send mixed signals. The 12-month headline inflation rate is expected to rise to 3.6%, causing concerns for the Biden administration. However, core inflation, which excludes food and energy prices, is projected to decrease to 4.3%, aligning with the Federal Reserve's goals. Past price trends influence both figures, so looking at recent data for a more accurate picture is crucial.

What To Trade In September
What To Trade In September

Here we go again, my friends. It’s time to look critically into the future of what trading opportunities September might have in store for us. As always, it is essential to note that the views expressed here are mine and should not be considered financial advice without proper examination.

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Can the Chinese Economy Recover?
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Amid concerns of a Chinese economic slowdown, reports of declining investment often overlook China's efficient investment strategy in emerging sectors for long-term growth. China has taken measures to stabilize foreign and private sector investments, like reducing the reserve requirement ratio to boost investor confidence.

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