Goldman CEO points out further correction of stock markets and subprime lending risks

1) Dollar-Won 1470 Boundary
Last night, the dollar-won (REGN) exchange rate closed at 1,468 won, up about 6 won from the previous day. This is due to the strong pressure on the dollar ahead of Nvidia’s performance and the release of U.S. labor market data. However, as it approaches 1,470 won, the authorities seem to be wary. “The dollar is strengthening, reflecting the lack of news, continuous adjustment in the market, and attention to upcoming event risks,” Scorser Bank said. Some analysts say that the high volatility of traditional safe assets such as gold, Swiss franc, and Japanese yen is increasing the dollar’s hedging appeal

2) Goldman CEO points out further correction of stock markets and subprime lending risks
“There is a correction in the market right now, which I think is a healthy phenomenon,” Goldman Sachs President John Waldron said. “The market is focusing on artificial intelligence (AI). The key debate is whether the market will be able to achieve the return on capital investment that it expects and whether those expectations have already been reflected in the stock price.” When asked about credit market risks, they pointed to subprime loans. “The weakest part of the economy is the vulnerable consumer, and a lot of loans have been made to the subprime sector of the economy,” he pointed out. He added that although loan screening standards have begun to loosen, this will not lead to a credit crisis, adding that “if the economy holds up, the credit market will be fine.”

3) Bond dealers reject Fed SRF utilization
Bond traders have pushed back against calls to use the Fed’s main borrowing system, the Permanent Repo (SRF), complicating the central bank’s efforts to ease repo market tensions. Primary dealers told officials at a meeting last week that borrowing directly from the central bank through SRF still carries negative perceptions, such as stigma effects, and could be interpreted as a sign of crisis. As a way to make the SRF more attractive, dealers have proposed allowing liquidation through the central clearing agency, the FICC, and other measures, according to officials

4) UK inflation slows for the first time in seven months
The UK inflation rate slowed for the first time in seven months, suggesting inflationary pressures have peaked. UK consumer price inflation in October was 3.6%, down from 3.8% in September. The drop in inflation figures to the lowest level since June was largely due to a slowdown in energy prices from the previous year. As a result, the pound expanded its fall against the dollar by nearly 0.8% amid expectations that the BOE could make a cut at its December meeting, while the money market priced its probability of a rate cut next month to around 80%

5) China Bans Seafoods and Movies in Japan
The Chinese government has suspended imports of Japanese seafood and suspended permission for the screening of new films after Beijing discouraged its citizens from traveling to Japan. A Chinese foreign ministry spokesman warned that it would take “serious countermeasures” if Japanese Prime Minister Takai Chi did not withdraw his remarks on Taiwan. The move comes after a bilateral meeting to ease tensions, and talks appear to have failed to make progress
(자료: Bloomberg News)