Kaohoon Morning Brief – 5 April 2022

1) Market sees policy rates above 3% this year

The market now sees the Federal Reserve pushing policy rates above 3% with 2.5% priced in by the end of this year as the market is now well above the U.S. FOMC dot plot. After the Fed is done stabilize the economy, around 100bps of rate cuts have been priced in by the market starting in 2024.


2) Elon Musk takes 9.2% stake in Twitter

The share price of Twitter (NYSE: TWTR) closed 27.13% higher at $49.97 per share after Elon Musk acquired a 9.2% stake in the company to become the platform’s biggest shareholder, according to the regulatory filing. 

Tesla CEO hinted last week that he might shake up the social media industry.


3) JPMorgan revises EM debt default rate for 2022 to 8.5%

JPMorgan raises emerging market corporate debt default rate forecast for 2022 from 3.9% to 8.5% at the start of the year due to more defaults expected in Russia, Ukraine, and China property.

In the meantime, JPMorgan revises up the corporate default forecast for Asia to $35 billion or 10% default rate, citing the revision is almost entirely due to China property firms.


4) Oil jumps as deaths in Bucha could trigger further sanctions on Russia

Oil prices spiked 4% yesterday after the report of civilian deaths in Bucha, Ukraine, could spark a new round of sanctions on Russia.

The Kremlin has denied the accusation of this wrongdoing, saying it was staged by Ukraine.

Yesterday, the international benchmark Brent crude rose 3.01% to close at $107.53 per barrel, and West Texas Intermediate rose 4.04% to close at $103.28 per barrel.