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Recession fears resurface

Today's news headlines:

‘Ten-year treasury yield falls below 3% as recession fears mount’. The US ten-year Treasury yield dropped below 3% this morning to trade at 2.96%. Demand for bonds is rising as markets grow concerned that progressively larger interest rate hikes by the Federal Reserve could tip the economy into a recession. The Fed is most concerned with restoring price stability as Chairman Jerome Powell believes growth consequences from raising rates are of lesser concern. US treasuries have registered their worst annual losses since the 1970s, with the US Treasury Index down over 9% year to date. (Bloomberg)

‘China’s Xi defends Hong Kong crackdown, promotes development’. China’s President Xi Jinping travelled to Hong Kong on Friday for the first time since 2017 as the country swore in new Chief Executive John Lee. Xi hailed the new administration declaring a new age for Hong Kong that would see a transition from chaos to governance. Lee highlighted the importance of aligning with Chinese policies while also maintaining cooperation with the rest of the world. Demonstration of China’s zero-Covid policy was also evident with Xi wearing a mask and social distancing. (Bloomberg)


Asian markets moved lower overnight as recession fears returned, European stocks opened in the red while US equity futures declined. The US Dollar and Japanese Yen have gained in early trade while oil prices continue their downtrend.


Japanese Tokyo Core Consumer Price Index y/y (June): 2.3% (est. 2.5%)
Chinese Caixin Manufacturing Purchasing Managers’ Index (June): 51.7 (est. 50.2)
Eurozone flash CPI and Core CPI y/y (June): 10:00AM
US ISM Manufacturing PMI (June): 3:00PM
Canadian Bank Holiday: All day

Interbank rates:

GBP/USD – 1.2106
GBP/EUR – 1.1596
EUR/USD – 1.0439
USD/CAD – 1.2926

The markets are moving. To speak to our team, please call +44 (0)20 3465 8200.