Markets start valuation rejig

<p>Kia ora,</p><p>Welcome to Tuesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news a global reassessment may be underway of the value of assets.</p><p>But first, <a href="https://www.newyorkfed.org/newsevents/news/research/2022/20220110" target="_blank"><strong>US consumer inflation expectations</strong></a> remain high, confirming the prior month jump. Inflation expectations for the year ahead remained at a record 6% in December. Home price expectations rose to 5.5% from 5% in November. However, at the same time, households reported increased optimism about their labour market prospects, with earnings growth, job loss risk, and job finding expectations all improving. Households' income growth expectations also improved, rising to a new series high.</p><p>However, global equity markets are wobbling as US Treasury yields reached a new two-year high and investors fretted about the prospect of rising interest rates and a surge in pandemic infections. The NASDAQ has been hit particularly hard in 2022.</p><p>The IMF <a href="https://blogs.imf.org/2022/01/10/emerging-economies-must-prepare-for-fed-policy-tightening/" target="_blank"><strong>said</strong></a> emerging economies must prepare for American interest rate hikes, suggesting that faster than expected Fed moves could rattle financial markets globally and trigger capital outflows and currency devaluations..</p><p>In China, Premier Li has <a href="https://www.cs.com.cn/xwzx/hg/202201/t20220110_6234262.html" target="_blank"><strong>ordered</strong></a> a speed up issuance of local government special-purpose bonds to help boost investment activity. New stimulus is underway in China to stem their stuttering economy.</p><p>The <a href="https://ec.europa.eu/eurostat/documents/2995521/14084165/3-10012022-AP-EN.pdf/53ac483e-71d9-3093-5bd8-12f1ea89683a?t=1641568191822" target="_blank"><strong>EU jobless rate</