It’s been a turbulent week or two for markets, with one central bank after another making it very clear the only way for rates right now is up as inflation tightens its grip on the global economy.
The hype around AI has made Big Tech the best performing asset of 2023, with a gain of 75%. At the end of H2 2022, that sector was showing a 10% loss. Beijing seems to be in no hurry to unleash massive stimulus so far and is instead drip-feeding it, first by cutting medium-term loan rates, then by lowering its key lending benchmarks.
A window into the housing market also comes on Tuesday with the Case-Shiller national home price index. The index climbed 0.4% in March after adjusting for seasonal fluctuations. The bank’s governors have been vying for the limelight since, to drive home the message that the fight against inflation is far from over. Even Greek governor Yannis Stournaras, a dove, has said he can’t rule anything out.
But the Riksbank has another big problem on its hands, as higher rates and falling property values squeeze Sweden’s indebted real estate market. Sweden’s banks are heavily exposed to the property sector too.