It’s in Hong Kong, and the AFP says that. As the International Monetary Fund downgraded its global growth forecast for 2022, oil started to rise again. Asian markets were flat on Wednesday, but oil started to rise again.
The International Monetary Fund cut its forecast for the world economy to 3.6% from 3.8% in January, which caused oil prices to fall 5% on Tuesday. This was a 0.8% cut from the previous estimate.
Rising energy prices, debt, supply-chain woes, and a series of inflationary crises linked to the war in Ukraine and the coronavirus pandemic were some of the things the fund said were causing the prices of goods to go up.
As Pierre-Olivier Gourinchas, the IMF’s chief economist, said in the report: “The economic effects of war are spreading all over the world, just like seismic waves that come from the center of an earthquake.”
After the announcement, oil prices showed their first sign of being affected by global economic trends. US stocks rose on the strength of good housing-starts data and strong corporate earnings.
“Without inventory buffers, there are only two things that can make oil prices go down: recession or a loss of demand. More people checked one or both of those boxes overnight because of the IMF’s warning about the economy and China’s long-term lockdown “Stephen Innes, a manager at SPI Asset Management, said this to me.
A COVID-19 outbreak in China has kept tens of millions of people from leaving their homes in the country’s economic capital, Shanghai, and the tech capital, Shenzhen. The outbreak has broken down supply lines and shut down businesses.
Along with the good corporate earnings and housing data, a lot of Wall Street’s strength came from how the market was set up.
Art Hogan, a strategist at National Securities, said that the market was “pretty oversold.” “It’s a nice rebound from an oversold position,” he said.
In Tokyo, the Nikkei 225 was a little higher because the yen was cheaper. In Hong Kong, the Hang Seng Index was a little lower because of China growth fears and Beijing’s crackdown on the tech sector on Tuesday.
People in Shanghai and Seoul were also going down. Sydney was going up. Jakarta was going down, and Taipei was going up.
