The US thinks China is losing ground. The comments from India upset a lot of people. Credit Suisse is weighing new job cuts. Today is what you need to know.
As Pentagon chief Lloyd Austin heads to Singapore for a regional security forum that will include a meeting with a top Chinese defense official, US officials think that China is losing its way in Asia. China has provided an opening for the US to solidify ties in Asia because of its insistence on Covid-zero policies and a growing backlash against China's assertive foreign policy. The full story on that can be found here. The US should be paying more attention to small islands in the Pacific due to the fact that China is seeing an exodus of South Korean firms.
The impact of high inflation is weighing down on bonds in Asia as stocks start to move. Hong Kong may offer a modicum of relief due to an ongoing rally in Chinese tech shares that's predicated on an easing regulatory crackdown and relaxed Covid curbs. One analyst is unconvinced by the optimism around Chinese tech stocks.
India is coming under fire in the Middle East for derogatory remarks on Prophet Muhammad, sparking calls for boycotts in a region that accounts for more than a tenth of the South Asian country's total trade. One party member was suspended and the other was expelled.
The battle in the city of Sievierodonetsk is one of the most important battles in the war, according to the Ukrainian President. The Organisation for Economic Co-operation and Development said the world economy will pay a "hefty price" for the war in Ukraine, with weaker growth, stronger inflation and possibly long- lasting damage to supply chains. The full story can be found here.
Credit Suisse is considering a fresh round of job cuts as part of a renewed push to slash costs after warning it expects a third straight loss this quarter. State Street could make a bid for the bank, according to a report. State Street isn't talking about it.
With March's 8.5% year-on-year print, there are signs that the peak is in for inflation. Swelling inventories and weakness in the housing market are some of the factors being cited as reasons for cost pressures to ease.
Inflation needs to come down quickly to head off a wage-price spiral for investors. It is likely that the Fed will keep hiking rates for some time to come, especially with the price of oil approaching 2008 highs. For the first time in a decade, inflation is above hourly wage growth, so workers will push for higher pay if it doesn't come down quickly. Consumer demand is hurt by real wages going backwards. There is skepticism that policy makers can engineer a soft landing.
Garfield Reynolds is based in Australia.
Garfield Clinton Reynolds helped with the project.
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