Welcome, dear readers. I’m Phil Rosen, reporting from New York.

Today, we are talking macro. China’s slowing growth is having repercussions around the world, although the repercussions vary depending on where you look.

This morning, I’m breaking down what you want to know about how the world’s second largest economy is moving global currency and commodity markets.

Here we are.


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China

A paramilitary soldier patrols near visitors posing for souvenir photos in Beijing’s Tiananmen Square on November 1, 2013.

REUTERS/Kim Kyung-Hoon


1. China’s economy is faltering and global markets have taken notice. According to Bank of America, Beijing faces a host of headwinds, including COVID-19 lockdowns and issues in the housing and labor markets.

“Meanwhile, unfavorable demographics and a weak return on investment after years of rapid infrastructure development pose structural challenges to growth,” analysts wrote in a Friday note.

For the United States, China’s economic weakness is mixed.

Thanks to an aggressive Fedthe yuan has weakened about 8% against the dollar over the past year, meaning it can help dampen inflation in the United States.

BofA noted that a 10% dollar appreciation reduces personal consumption expenditure inflation by about 0.4%.

But at the same time, if China’s pandemic lockdowns persist for much longer, the United States could see further supply chain disruptions, which could ultimately add inflation pressure to American goods.

Meanwhile, China’s slowdown is having less impact in Europe because the continent remains focused on the energy crisis and Russia, analysts noted.

But Latin America is heavily exposed to ChinaChile sends 40% of its total exports there, while Brazil and Peru each send around 30% of their totals.

“On the positive side, lower commodity prices are helping inflation slow down this year, falling from a peak of around 12% to 6.5% by the end of the year,” BofA said. .

“On the negative side, they affect Brazil’s fiscal situation and trade balance. Therefore, the weaker growth in China has a negative impact on Brazilian exports and growth – remember that China accounts for almost a third of exports Brazil’s total, equivalent to about 5% of the country’s GDP.”

What do you think will happen next for the Chinese economy? What would extended COVID-19 lockdowns mean for global economies? E-mail [email protected] or tweet @philrosenn.


In other news:

Fed Chairman Jerome Powell

Federal Reserve Chairman Jerome Powell

Win McNamee/Getty Images


2. US stock futures, cryptocurrencies and oil prices fell early on Monday, as investors brace for rate decisions from the Fed, Bank of Japan and Bank of England this week. Meanwhile, the London Stock Exchange is closed for The funeral of Queen Elizabeth II and will reopen on Tuesday. Here are the latest market moves.

3. Earnings on deck: AutoZone Inc., FedEx Corp. and City of London Investment Group Plc, all filers.

4. Top $10 trillion stock picker BlackRock shared where to put your money right now to fight soaring inflation and recession risks. Tony DeSpirito offered a two-pronged strategy for succeeding in today’s environment – here are his three best investments of the moment.

5. It’s time to buy the drop in stocks after last Tuesday’s rout, according to Fundstrat. The market bottomed months ago, the company said, as the S&P 500 typically bottoms shortly after inflation spikes. Additionally, the percentage of bearish stocks suggests that it may be time to close some deals.

6. Deutsche Bank announced that the Fed would raise rates to 5% to control inflation. Bank economists said the central bank typically beats the rate of inflation before it begins to cut. Get the bank’s outlook here.

7. Fed moves and global growth fears have weighed on currency markets this year. From the dollar to the yen to the yuan, this is what to expect from the biggest currencies in the world in the future.

8. A Credit Suisse investment manager explained why the bank had reduced its weighting in US equities and said the probability of a recession was 35%. This bearish outlook prompted the company to downgrade its stock indexes, Jack Siu told Insider. Here’s how the bank positions its billions of dollars in client assets.

9. The Ethereum merger has just reduced the energy consumption of its network by 99%. But there are a lot of moving parts and technicalities to note. These 10 podcasts will help you better understand the impact of one of the biggest events in crypto history.

CPI inflation


Madison Hoff and Andy Kiersz/Insider


10. Consumer expectations for long-term inflation have fallen to their lowest level since July 2021. Over the next five to 10 years, consumers are seeing prices increase by 2.8% per year, according to the University of Michigan. And over the next year, consumers see prices jump 4.6%.


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Organized by Phil Rosen in New York. (Comments or advice? [email protected] or tweet @philrosenn).

Edited by Max Adams (@maxradams) in New York and Hallam Bullock (@hallam_bullock) in London.