Markets pin hopes on soft landing, with one eye on recession risk

A stellar rally in equities and bonds suggests market confidence is high for the world economy to reach a soft landing after a run of aggressive interest rate hikes. Yet labour markets are softening, the euro zone faces recession and China's property sector is in crisis. But unemployment is rising, nearing a closely-watched 'Sahm rule' threshold, that has shown historically a recession is underway when the three-month rolling average unemployment rate rises half a point above the low of the prior 12 months.