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January 2023 - A wind of optimism lifts the markets at the start of the year
January 2023 -The global stock markets started the year strongly, lifted by optimism about easing inflationary pressures and expectations of an end to the interest rate hikes. In Canada, for example, the annual inflation rate eased from 8.1% in June to 6.3% in December. Even though inflation remained well above the Bank of Canada’s 2.0% target, the markets welcomed the news. At the end of January, the Bank of Canada raised rates by 25 basis points, bringing its key rate to 4.5%. At the same time, it announced a “conditional pause” on its hikes in order to assess the economic situation and the impact of the cumulative increases. In the United States and Europe, the situation was similar. The markets rose on hopes that the central banks would reduce their aggressive rate hikes, while Asia and emerging markets benefited greatly from the rapid reopening of the Chinese economy.