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Asia shares declined on Friday, influenced by a strong dollar that dampened risk sentiment. Meanwhile, longer-dated Treasury yields are on track for their largest weekly increase this year, as expectations for significant U.S. rate cuts in 2025 diminish.
On December 12, a significant defense deal was signed to bolster India's military capabilities, aligning with the 'Aatmanirbhar Bharat' initiative. The stock market saw notable movements, with three NSE stocks surpassing their 200-day moving average, while Zomato faced an ₹803 crore GST demand. Additionally, the Cabinet Committee on Security approved a project for 100 K-9 Vajra howitzers, impacting L&T stocks.
The ECB has reduced its key deposit rate from 3.25% to 3.00%, widening the interest rate differential with Switzerland to 2.5 percentage points after the SNB cut its rate by 50 basis points. The euro briefly strengthened against the franc, reflecting market reactions to the rate changes.Economic growth forecasts have been downgraded, with the ECB now expecting only 0.7% growth for the current year, down from 0.9%. Concerns over Germany's industrial struggles and potential trade conflicts add to the economic challenges facing the Eurozone.
The ECB, led by President Christine Lagarde, has cut the deposit rate from 3.25% to 3.00%, widening the interest rate differential with Switzerland to 2.5 percentage points after the SNB's 50 basis point reduction. The euro gained against the franc, reflecting market reactions to these changes. Economic growth forecasts have been lowered, with the ECB now expecting only 0.7% growth for the current year, down from 0.9%.
In anticipation of a potential stock market crash in 2025, an investor is preparing to buy shares of InterContinental Hotels Group (IHG), a global hotel brand with a diverse portfolio. Despite its recent strong performance and high valuation, the investor sees long-term potential due to growing travel demand among retirees. However, geopolitical risks and economic factors could impact market stability.
The Swiss National Bank (SNB) has cut its key interest rate to 0.50%, raising concerns about the potential return of negative interest rates by the end of 2025. Chief Investment Officer Thomas Rühl suggests that while negative rates could stimulate investment, they may also pressure banks and pension funds, pushing them towards riskier assets. The SNB is expected to implement measures to protect small savers from negative rates, similar to past exemptions.
The US economy is expected to maintain its exceptional status into 2025, driven by Trump's "America First" policies, which favor US equities through tax cuts and deregulation. However, potential challenges include a narrowing growth differential, inflation concerns affecting tariffs, and high valuations that could lead to underperformance. Despite these risks, the outlook remains positive for US equities, supported by strong productivity and capital inflows into technology sectors.
The Swiss National Bank (SNB) has reduced the key interest rate by 50 basis points to 0.5%, signaling urgency amid economic uncertainties and low inflation. While some economists view this as a necessary step to curb the franc's appreciation, others believe its impact will be limited, raising concerns about the SNB's remaining monetary policy tools. The strong franc continues to negatively affect SMEs, with many calling for measures to prevent further appreciation against the euro.
The Swiss National Bank (SNB) cut key interest rates by 50 basis points to 0.5% amid economic slowdown and low inflation, signaling urgency to prevent further appreciation of the Swiss franc. Economists express concern over diminishing options for future rate cuts, with potential foreign exchange market interventions on the table. The decision reflects growing uncertainty in the economic outlook, particularly regarding U.S. and European policies, while SMEs voice worries about the strong franc's impact on their operations.
UBS has a positive outlook on the British pound (GBP), Australian dollar (AUD), and Swiss franc (CHF), citing high interest rates and expected monetary easing in the UK and Australia. The firm predicts GBP will rise to 1.35 and AUD to 0.68, while CHF is expected to decline to 0.84 due to narrowing interest rate differentials.In contrast, UBS maintains a neutral stance on the Japanese yen (JPY), forecasting a potential short-term rise to 155 but a medium-term decrease to 145 by 2025. The firm is bearish on the Chinese yuan (CNY), anticipating it will rise to 7.50 amid escalating US-China trade tensions and risks of further depreciation despite efforts to stabilize it.
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