Global Economy | US might narrowly escape recession in 2023: Morgan Stanley

A series of reports published Sunday by Morgan Stanley said that Britain and the euro zone economies are likely to tip into recession next year, while the United States might make a narrow escape, thanks to a resilient job market.

At the same time, China's expected reopening after almost three years of COVID-19 curbs is set to lead a recovery in its own economy and other emerging Asian markets.

Oil prices fell on Monday, due to a firmer US dollar and record high coronavirus cases in major Chinese cities that dashed hopes of the reopening of the economy of the world's biggest crude importer. Brent crude futures were down 32 cents, or 0.3 per cent, to $95.67 a barrel by 0725 GMT after settling up 1.1 per cent on Friday while WTI crude futures fell 39 cents, or 0.4 per cent, to $88.57 a barrel after closing Friday's session 2.9 per cent higher.

India's annual wholesale price-based inflation (WPI) eased in October to 8.39 per cent year-on-year, the lowest since March 2021. A fall in commodity prices helped the situation, government data showed on Monday.

The October WPI inflation was lower than the Reuters forecast of 8.70 per cent and 10.70 per cent recorded in the previous month.

Gold prices retreated on Monday from a three-month peak hit in the previous session. The dollar and Treasury yields edged higher after a top US central banker warned that the Federal Reserve was not softening its fight against inflation.

Spot gold fell 0.6 per cent to $1,760.72 per ounce by 0712 GMT, after hitting its highest since Aug. 18 on Friday. U.S. gold futures eased 0.3 per cent to $1,763.80.

The Indian rupee was trading lower against the US dollar on Monday. It was unable to hold on to its advance at the open, as there was a "mad rush" to buy dollars after the open. The rupee was at 81.0825 to the dollar by 0506 GMT, down from 80.7950 in the previous session. The local unit had opened at 80.52.

Indian shares were muted on Monday as investors awaited inflation data, due later in the day. The data will provide clues on the central bank's interest rate trajectory and comes ahead of a slew of corporate earnings reports. The NSE Nifty 50 index was up 0.1 per cent to 18,366 as of 0405 GMT, while the S&P BSE Sensex, which hit a record closing high on Friday, rose 0.19 per cent to 61909.51.

The US dollar held firm on Monday following a dive last week as Federal Reserve Governor Christopher Waller said that the central bank was not softening its fight against inflation. A slightly cooler-than-anticipated inflation data on Thursday led to the dollar index sliding 3.6 per cent over two sessions last week, its biggest two-day percentage loss since March 2009.

Japan's SoftBank Group Corp's shares plunged on Monday after the company reported a heavy loss at its Vision Fund investment arm for a third consecutive quarter. SoftBank shares were down 11.2 per cent in morning trade, on track for their biggest one-day loss in more than 2-1/2 years.

The International Monetary Fund said on Sunday that the global economic outlook is even gloomier than projected last month. It cited a steady worsening in purchasing manager surveys in recent months.

It blamed tightening monetary policy triggered by inflation, weak growth momentum in China, and ongoing supply disruptions and food insecurity caused by Russia’s invasion of Ukraine as the reasons.

The global lender last month cut its global growth forecast for 2023 to 2.7 per cent from a previous forecast of 2.9 per cent.

Oil prices rose nearly one per cent on Monday, extending gains from the previous session. China's move to ease some of its strict COVID-19 protocols fuelled hopes of a recovery in economic activity and demand at the world's top crude importer.

Brent crude futures rose 87 cents, or 0.9 per cent, to $96.86 a barrel by 0041 GMT after settling up 1.1 per cent on Friday.

Asian share markets were mixed on Monday after a top US central banker warned investors against getting carried away over one inflation number. Meanwhile, Chinese stocks gained on signs of aid for the hard-hit property sector.

The collapse of cryptocurrency exchange FTX is being scrutinized by government investigators in the Bahamas to check whether any "criminal misconduct occurred," the Royal Bahamas Police said on Sunday.

FTX filed for bankruptcy on Friday in what is one of the highest profile crypto blowups. Traders rushed to withdraw $6 billion from the platform in just 72 hours and rival exchange Binance abandoned a proposed rescue deal.