MyStratWeekly – May 2th 2023

Topic of the week: The consumer: the new engine of Chinese growth?

• The post-“Zero-Covid” recovery is supported by consumption;
• Its sustainability will depend on the nature of the savings accumulated by Chinese households;
• And the labor market and the private sector outlooks;
• The greening of the Chinese economy will allow the rebalancing of Chinese growth towards consumption;
• The main beneficiaries will be countries producing agricultural products and so-called “green” metals.

Market review: Market confusion

• The Fed and the ECB should raise their rates by 25bp this week;
• Low growth in the euro zone and the United States;
• Equities caught between banking risk and solid publications;
• The yen drops after the BoJ meeting

Stéphane Déo's and Zouhoure Bousbih's podcast

• What to expect from Central Banks meetings this week?
• After the acquisition of FIRST REPUBLIC by JP MORGAN, should we expect further consolidation of the US banking sector? Will the big American banks have the means to take over the most fragile ones?

Chart of the week

For the first time, the yuan overtook the dollar in China's cross-border payments and receipts. Cross-border transactions rose to a record $549.9 billion in March from $434.5 billion in February. The Chinese Renminbi was used in 48.4 % of all cross-border transactions, while the dollar’s share declined to 46.7 % from 48.6 % a month earlier. 
China has long been promoting the use of yuans as part of an effort to internationalize its currency. However, the yuan’s use in global trade finance remains low. The yuan’s share of global currency transactions for trade finance rose to 4.5 % in March, while the dollar accounted for 83.71 %.