Q2 2023 Outlook

During the first quarter of the year, several noteworthy developments took place in the financial landscape:

• US-China Tensions: Amid escalating tensions between the United States and China, US national security was compromised by a spy balloon. Concurrently, Buffett's Berkshire Hathaway Inc reduced its holdings of TSMC's American depositary receipts by 86%, while Apple CEO Tim Cook began diversifying production away from China, hinting at potential trouble ahead.
• China-Russia Relations: China's growing alignment with Russia was evident as Chinese Prime Minister Xi visited Vladimir Putin to discuss a potential “peace agreement.”
• Bank of Japan Policy Change: The Bank of Japan decided to raise its yield curve control limit following a $3 trillion QE injection.
• China's Economic Reopening: Despite expectations, China's economic reopening did not significantly impact commodity prices.
• US Bank Deposits Outflow: US banks faced the largest outflow of deposits in history, amounting to a staggering $747 billion.

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