Good morning from Singapore. We're seeing more signs that the U.S. economy is indeed slowing down following nine straight Federal Reserve rate hikes. The U.S. central bank has been targeting the red-hot labor market as it tries to bring down inflation, which peaked at a 41-year high last year.
A shrinking number of job openings isn't the only indicator that slower growth is ahead. Fewer people are inclined to quit their jobs. People quit when they're confident about their ability to switch jobs – and that figure rose by only 146,000 to just over 4 million.
And we're seeing companies such as Virgin Orbit filing for Chapter 11 bankruptcy in the United States after failing get more funding. The firm laid off nearly all its workforce. Amazon is piling on layoffs beyond the massive job cuts it already announced this year.
The message from JPMorgan's Jamie Dimon is anything but comforting – though he says the recent banking crisis is "nothing like what occurred during the 2008 global financial crisis," he emphasized that the worst is still ahead.
"Any crisis that damages Americans' trust in their banks damages all banks," he said – calling on regulators to keep better taps on banks' risk management.
But real question is: Will the Fed keep going? Cleveland Fed President Loretta Mester said in a speech in New York that the rate target will need to exceed 5% – echoing Fed officials' determination to bring inflation down further.
The U.S. Labor Department will release fresh nonfarm payroll numbers for March this week. The street's expectation is that unemployment holds steady at 3.6%. If the job market proves more resilient than that, the Federal Reserve has room to hike even further.
New Zealand surprised markets with a bigger-than-expected rate hike of 50 basis points. The Kiwi strengthened nearly 1% against the dollar after the move. That move contrasts with Australia's central bank, which took a breather on rate hikes yesterday, saying it needs to further assess the effect tightening is having on its economy.
