Global Economic Resilience Faces Middle East Conflict Test, Citic Securities Reports

Citic Securities has highlighted in a recent report that the resilience of the global economy is being tested by conflicts in the Middle East, with the Strait of Hormuz showing signs of reopening for navigation. According to Jin10, the U.S. economy may continue to grow moderately and unevenly within the year, while the EU's weak recovery is being delayed. Japan's private demand is likely to be disrupted by energy shortages. High oil prices are contributing to global inflation, with overall inflation rates in the U.S. and Europe potentially fluctuating at high levels this year, while Japan's apparent inflation rate may remain moderate. The Federal Reserve is unlikely to cut interest rates this year, while potential rate hikes by the European and Japanese central banks are imminent. The "unrestrained" fiscal stance in Japan and Europe could pose market risks this year. Citic Securities maintains the view that U.S. stocks will outperform U.S. bonds, and the U.S. dollar index will find support. Gold prices are expected to overcome challenges as tail risks from inflation subside.