Happy morning, Munchers! 🙏

It's just Tuesday, but I swear it feels like the New Year already.

As always, here is your daily dose of the news that matters, from Wall Street to Dalal Street - in 4 minutes and 53 seconds.

That's less time than it takes for India and Ukraine to become best friends, macro funds to ring in a blowout year, and China to wave COVID away. 🔥

Let’s dive in.

What’s hot, what’s not?

Market Commentary

• Holiday season meant that not much was moving markets. Traders are sipping on hot chocolate to ring the year in, and volume was sparse across most markets.

• Stocks made small advances while markets search far and wide for a Santa Claus rally. Maybe we weren't as nice as we think. 🤷🏼

• Indian markets also had a decent day. About 80% of the market ended up in the green, with banks and oil gaining the most. The Lalas on Dalal Street are looking forward to a lovely long weekend.

Story Roundup

1 - China says bye-bye to zero-COVID days. 👋🏼

Things in China are teetering.

They just removed quarantine requirements for travelers coming into the country - so go ahead and plan that Wuhan visit you've always wanted to.

Corona is sweeping China like it's never done before, it's forcing the government to change their tone.

They also scrapped the need for positive cases to quarantine in government-supervised areas.

All we need to hope for is that things don't spiral out of control.

2022 was 2020 too, but 2023 can be different. 🤣

2 - Macro hedge funds toast to a brilliant year. 🥂

Hedge funds that trade bonds and currencies are on course for a blowout year.

Times are so great for them that it's gonna be their best year since the 2008 crisis.

Trends that left a dent in stock investors' returns are the exact ones that buoyed macro funds to greater returns.

The biggest (and most profitable) bets have been on - rising interest rates all across the board- against the UK pound when all that turmoil was happening- bets on rising yields (and a fall in bond prices)

Even the security guards in macro fund offices are short Japanese government bonds. 🤫

3 - Europe looks excited to tighten things up. 😳

A quick look into Europe's diet shows us that they're gonna be fed a steady stream of rate hikes.

Pretty healthy. Or not, depending on who you are.

An ECB policymaker said that we just passed the halfway point in their tightening cycle.

They want to be in there for the long game to tame inflation, which is difficult when GDP growth is evaporating.

The risk of the ECB doing too little is still the bigger risk - so we're gonna have rates stay higher for longer.

That is an insanely long road to walk. I doubt any of us have legs that strong. 💀

4 - Researchers bet on a recession blitzing us. ⚡

Central bankers will stick to their guns in 2023.

The global economy passed the $100tn mark, but it looks like we'll be stumbling for a bit.

Researchers and economists think that the battle against inflation has not been won yet. That means we need to stay the course, and the road ahead looks pretty gloomy.

A recession is more-or-less inevitable by next year according to the CEBR, and it's gonna hit the West harder than the East.

Seatbelts in, folks. 🙏🏼

5 - Ukraine counts on India. Seriously. 🤝

So it turns out Narendra Modi and Volodymyr Zelensky had a pretty long phone call.

They spoke about a peace formula between Russia and Ukraine and it turns out that India will be participating in it.

Modiji also requested Ukrainian authorities to continue educating Indian students fleeing Ukraine this year.

It's not groundbreaking news, but it's still pretty major.

Russia said that they are open to "discussions" about the Ukraine situation, which means that anything bringing us closer to the finish line is good.

2023 could be better. 🤷🏼

Hope you enjoyed this issue of the Market Munch. If you've got any feedback - good or bad (😏) you can hit reply to this email. Thanks a ton for reading!

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Cheers, and have a lovely day. 🙏

Aryaansh