The world economic recession continues, the market looks for direction

[Canadian inflation slows to 6.3%, opening the door for a pause in interest rate hikes]

Both headline inflation in Canada and the Bank of Canada's favored gauge of underlying stress eased, suggesting the central bank may stop aggressive rate hikes soon. The CPI report showed that rapid rate hikes over the past 10 months have begun to dampen price increases, although inflation remains well above the central bank's 2 percent target. The data bolstered the view that the central bank's most aggressive tightening cycle is coming to an end, with the Bank of Canada expected to raise interest rates by 25 basis points next week before pausing.

[The European Commission pays Ukraine a loan of 3 billion euros]

The European Commission announced that it paid Ukraine the first tranche of 18 billion euros in macro-financial loans, amounting to 3 billion euros. In 2022, the EU decided to provide Ukraine with a total of 18 billion euros in macro-financial loans in installments throughout 2023. On January 16 this year, the two parties signed a loan memorandum of understanding.

[The market is looking for a new direction for the Fed to raise interest rates]

Investors are still figuring out the Fed's future rate hike path and global recession expectations are rising. The Fed slowed the pace of rate hikes to 50 basis points in December after four consecutive hikes of 75 basis points. The Federal Reserve will announce a new deal on February 1, and the market expects the rate hike to further slow down to 25 basis points.

[All sectors of the world agree with recession expectations]

The prospect of an imminent global recession cast a long shadow over the World Economic Forum's annual meeting in Davos on Monday. Participants at the opening of the World Economic Forum's annual meeting calculated the likely cost to their economies and businesses. Two-thirds of private and public sector chief economists surveyed by the World Economic Forum expect a global recession this year, with about 18% saying it is "very likely" -- by September 2022 More than double that of the previous survey conducted.

[The market predicts that the oil price will be US$90/barrel in the next few years]

The market expects oil prices to average $90 a barrel between 2023 and 2027. The average forecast for Brent in 2023 is $87 a barrel. Brent crude is trading around $84 a barrel and WTI is nearing $80 a barrel. While some banks expect oil prices to rise sharply, others expect prices to remain stable this year. Two factors will determine the level of volatility in oil prices in 2023. The first is the Asian epidemic, and the other is the US shale oil industry.

[European fund managers plan to increase gold holdings in 2023]

2023 begins with the gold market on solid footing, with a Europe-based fund seeing huge potential as investors renew their interest in the precious metal. Wealth fund managers see central bank demand for gold as a major bullish factor for gold. According to the World Gold Council (WGC), as of the end of the third quarter in 2022, central banks bought 673 tons of gold, the highest cumulative purchases in a single year since 1967. 83% of fund managers expect central banks to continue buying gold in the new year.