Heading into the 2023 recession?

Global equities headed for the second weekly loss after US and European central banks reiterated that they would continue with their interest rate increases in 2023 to curb the hot inflation. S&P 500 and Nasdaq lost 1.85% and 2.68% and Canada"s S&P/TSX Composite shed 2.33% during the week.

Although the US inflation softened in November to 7.1%, the US central bank is willing to continue the tightening cycle although many argue that global economies heading into recession in 2023. The officials are however looking at the super tight job market and the unemployment rate at a record low and even willing to taste recession than letting the inflation stay over their 2% target.

The signs are recession are resurfacing with many companies stopping hiring and big names like

Goldman Sacks talking about laying off 4,000 of their employees which is 8% of their workforce. The continued hawkishness of the US central bank pushed the US dollar higher at 1.36 CAD.

Commodity prices also softened but still with a positive outlook for 2023. Oil prices continued to trend lower with West Texas Intermediate crude oil trading at 74 a barrel. Meanwhile, riskier assets including cryptocurrencies continued their decline with continued FT exchange collapse casting a shadow over the markets.