Beyond Markets

Recent escalating developments in the Middle East conflict appears to have reduced the likelihood of ceasefire. Wage growth in April was its lowest since June 2021, which should mean less inflation. However, the Cleveland Federal Reserve predicts the upcoming headline April CPI inflation reading will be a disappointingly high 3.5% year/year, the same as March. The Yen fell 5% in April, then bounced 5% since then. There’s been no event, so the best we can say is as long as people can borrow at 1% in Yen and invest at 6% in US Dollars, the currency will go down. But a Big Mac in Japan is 12% cheaper than a Big Mac in China, while Japanese incomes are 6x higher than Chinese ones. It’s not possible for a developed market to have emerging market prices forever.  

This episode is presented by Mark Matthews, Head of Research Asia at Julius Baer.

What is Beyond Markets?

“Beyond Markets” by Julius Baer is a series featuring conversations with experts to share recent market developments, key insights, and strategic inputs from around the globe. In each episode, we cut through the noise to offer practical advice and macro research on today’s shifting economic and market landscape.
The information contained in this podcast is marketing material. Opinions expressed do not constitute independent financial/investment research, investment advice, or an offer to buy or sell securities by Julius Baer. Please refer to www.juliusbaer.com/legal/podcasts for important legal information prior to listening to this podcast.