The US stock market rebounded on the 28th. He shook off concerns over the yield curve control (long-term interest rate control, YCC) operation flexibility by the Bank of Japan. A series of U.S. economic data released on Monday led to widespread speculation of a Goldilocks scenario in which the economy is neither too hot nor too cold.
S&P 500 Stock Index 4582.2344.820.99% Dow Jones Industrial Average 35459.29176.570.50% Nasdaq Composite Index 14316.66266.551.90%
June’s US personal consumption expenditure (PCE) price index slowed down from a year ago in both headline and core prices. The University of Michigan Consumer Confidence Index (confirmed) hit its highest level since 2021 in July.
US consumer spending picks up, PCE core price index slows y/y (2)
US Consumer Confidence Index hits highest level since October 2021 as inflation slows (1)
Gina Volvin, president of Volvin Wealth Management Group, said in a statement that “there is plenty of economic data coming out this week, all of which points to an increasing likelihood of a soft landing.” “This could trigger a new high for the market,” she said.
On this day, stocks with large market capitalizations are the main ones to rise. The Nasdaq 100 index, which focuses on big tech stocks, rose nearly 2%. The S&P 500 stock index has risen for the third consecutive week on a weekly basis. Meta Platforms and Tesla both rose more than 4%. Intel, which announced its financial results after the close of trading on the previous day, surged on the back of a bullish sales outlook.
CIBC Private Wealth US Chief Investment Officer David Donabedian said the current macro environment is so strong that there is widespread speculation that the Fed will be able to keep inflation down without triggering a recession. point out that it is inviting buying.
“There have been three pieces of good news for the market over the past few weeks: lower inflation, a stronger economy and corporate earnings so far better than expected. is continuing its upward trend,” he said.
government bond
The US Treasury market rose (yields fell). A series of US economic indicators supported the Treasury market, including a slowdown in growth in the April-June employment cost index and a downward revision to July’s Michigan Consumer Confidence Index (confirmed value) from preliminary figures.
U.S. employment cost index slows to 2-year low
JGB latest price change rate (bp) US 30-year yield 4.01%-3.0-0.75% US 10-year yield 3.95%-4.8-1.19% US 2-year yield 4.88%-5.0-1.01% East US time 16:57
The yield curve for US Treasuries has also steepened slightly as the Bank of Japan softened its YCC policy and yields on 10-year Japanese government bonds soared to their highest level since 2014. The US Treasury yield curve had already been bear-steepening the day before after reports that YCC flexibility was being discussed.
22V Research founder Dennis Devscheer believed that a major revision to the YCC policy would have an impact on the Treasury market, but “the actual YCC revision has not been as dramatic as feared. ‘He said.
foreign exchange
In the foreign exchange market, the yen has lost all its gains against the dollar following the Bank of Japan’s YCC revision. Investors remain divided on the impact of the revisions. Yen volatility fell.
Bloomberg Dollar Index 1216.17-1.44-0.12% USD/JPY¥141.16¥1.681.20% EUR/USD$1.1018$0.00390.36% 16:57 US Eastern Time
The yen also hit the high 138 yen level to the dollar at one point in New York time, but was pushed by selling after that and dropped to 141.18 yen.
“While the market may still be parsing the BOJ’s message, we see the revision as an early step towards an eventual exit from the YCC policy,” said Alan Lau, FX strategist at Maybank. pointed out. “Effectively, the Bank of Japan will raise the cap to 1%. From a currency perspective, this should be a tailwind for yen appreciation,” he said.
UBS strategists James Malcolm and Vasili Serebriakov said the BOJ’s revision of its YCC policy was a “meaningful step in the right direction” but that Governor Kazuo Ueda’s message remained “extremely dovish”. . The dollar/yen exchange rate is expected to hit 130 yen to the dollar by the end of 2023. The previous forecast was 120 yen.
Aberdeen’s James Azey said he doesn’t see the yen carry trade completely over. Short-term interest rates are still stuck near zero, making it still attractive as a funding currency, he said.
crude
The New York crude oil futures market continued to rise. Oil prices have continued to rise on the back of tight global supplies and speculation that the U.S. interest rate hike cycle is coming to an end.
Oil prices have been pushed up by cuts in supply from Saudi Arabia and Russia, which are central players in OPEC+, a group of OPEC and non-member oil producers. Standard Chartered, UBS Group and others expect tighter supply and demand conditions in the coming months.
Inventories at Cushing, Oklahoma, a major U.S. crude delivery hub, have fallen by 7.5 million barrels over the past four weeks, to their lowest level since May.
On the other hand, the outlook for global crude oil demand is improving, partly due to speculation that China will take additional economic measures.
However, traders are also gearing up for a potential correction after crude oil futures traded at overbought levels this week in the RSI.
WTI futures for September delivery on the New York Mercantile Exchange (NYMEX) rose 49 cents, or 0.6%, to $80.58 a barrel. London ICE North Sea Brent September delivery rose 75 cents, or 0.9%, to $84.99.
Money
The New York gold market rebounded. With the data released this morning showing slowing growth in US inflation and wages, it was understood that the pressure to raise interest rates had receded.
The PCE core price index for June and the employment cost index for April-June both eased inflation fears. Sustained high inflation will put pressure on the Fed to keep tightening, and higher interest rates will reduce the relative attractiveness of non-interest-bearing gold.
December futures on the New York Mercantile Exchange (COMEX) rose $14.70, or 0.7%, to close at $1,999.90 an ounce.
Original title:Wall Street Rekindles Risk-On ‘Goldilocks’ Trade: Markets Wrap(excerpt)
Treasuries Post Small Gains on US Data, Paring Weekly Loss（抜粋）
Yen Falls, Paring Weekly Gain, as BOJ Impact Fades: Inside G-10（抜粋）
Oil’s Tight Supply, Better Demand Outlook Spur Fifth Weekly Gain(excerpt)
Gold Rises as US Inflation, Wage Measures Ease Fed Hike Pressure（抜粋）
2023-07-28 20:58:00
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