<p style=““ class=“text-align-justify“>If you think back to eight to ten years back, the European economy was in a massive blackhole – having to deal with the sovereign debt crisis, threats to the Eurozone breaking up, and weakening growth alongside rather depressed inflation pressures. The ECB had no room to wiggle with its easy monetary policy (negative rates) and we all were witnessing the Japanification of Europe.</p><p style=““ class=“text-align-justify“>German bond yields were in negative territory for the better part of the last decade and if not for the pandemic, any one person in the market would have laughed off the thought of yields rising back to 2008 levels. Yet, here we are today.</p><p style=““ class=“text-align-justify“>It’s one of those things that you should never say never in markets, or at least something along those lines.</p><p style=““ class=“text-align-justify“>Amid the holiday period, yields are continuing to climb as bonds are being sold again after the more hawkish ECB narrative earlier this month. A 50 bps rate hike for the central bank’s next meeting is also very much fully priced in – some 90% roughly.</p><p style=““ class=“text-align-justify“>It’s all about the inflation story now for European policymakers, they can somewhat be thankful that got a sort of reset button to distract from their shortcomings and failings since the global financial crisis.</p><p style=““ class=“text-align-justify“>But knowing how people never change, it is only a matter of time before the region succumbs to the same kind of blunders in the past and we’ll be talking about the same sort of incompetence once again.</p><p style=““ class=“text-align-justify“>For now, the inflation outlook will spare them the scrutiny but once the world starts to move to the next phase of the post-pandemic era, we’ll see who manages best. And if history is any indication as was the case after the global financial crisis, euro area lawmakers and policymakers don’t have the greatest of track records.</p>

This article was written by Justin Low at www.forexlive.com.

<ul><li>Domestic sight deposits CHF 506.4 bn vs CHF 510.2 bn prior</li></ul><p style=““ class=“text-align-justify“>There has been little change in overall sight deposits over the past two to three weeks, as the SNB takes it slow after its recent policy tweaking in the past few months as highlighted <a target=“_blank“ href=“https://www.forexlive.com/news/whats-behind-the-sudden-plunge-in-snb-sight-deposits-20221017/“ target=“_blank“ rel=“follow“>here</a> previously.</p>

This article was written by Justin Low at www.forexlive.com.

<p style=““ class=“text-align-justify“>Well, it’s not like the numbers matter anyway but if anything else, the end of China’s zero-Covid policy is very much a neat bookend to the whole pandemic over the past three years. The disease has been downgraded by China authorities from top-level Category A to Category B i.e. „only requiring necessary treatment and measures to curb the spread“.</p>

This article was written by Justin Low at www.forexlive.com.

<p style=““ class=“text-align-justify“>Starting from 8 January next year, China will reopen its borders and lift quarantine measures as they are set to label Covid as a disease that only requires „necessary treatment and measures to curb the spread“. That will officially put an end to their zero-Covid policy – which has been in place for roughly three years already now.</p><p style=““ class=“text-align-justify“>It’s a change in the times and how things progress will have significant implications globally. For now, the spread of infections will still somewhat limit China’s „openness“ but give it a few months, and we’re likely to see normalcy resume.</p><p style=““ class=“text-align-justify“>The biggest impact will likely come from the lifting of border restrictions, which is likely to see consumption activity increase drastically. We already saw how travel-deprived the rest of the world has been and upon the slow reopening over the past year-and-a-half, tourism has not died down whatsoever.</p><p style=““ class=“text-align-justify“>Now, China travellers will be the ones having to play catch up and that pent-up demand will also show up in other parts of the world.</p><p style=““ class=“text-align-justify“>It’s a boon for the global economy but it could also result in inflation pressures keeping that little bit higher, depending on how consumption activity rolls out in the months ahead.</p><p style=““ class=“text-align-justify“>The easing of supply disruptions has also been a welcome development and with China’s approach moving forward, we are not likely to see any major hiccups to supply chains and shipping as well – barring another major outbreak in key cities.</p><p style=““ class=“text-align-justify“>For markets, the most significant thing to watch out for is how does all this impact the inflation outlook for next year. It could be a subtle driver, but China demand could very well just add that little twist on how things are going to look like in 2023.</p>

This article was written by Justin Low at www.forexlive.com.

<p>This is a big policy change from China, a major step toward fully reopening travel with the rest of the world.</p><p>Currently, arriving passengers must quarantine for </p><ul><li>five days at a hotel</li><li>then followed by three days at home</li><li>down from a full 3 week quarantine period</li></ul><p>China’s National Health Commission announced on Monday that there would be no more quarantine requirement. </p><ul><li>people arriving in China will still need a negative virus test 48 hours before departure</li><li>passengers will be required to wear protective masks on board</li></ul>

This article was written by Eamonn Sheridan at www.forexlive.com.