SMM10, 31 March: in October, the global capital markets experienced the biggest storm of the year, with stock markets plummeting, crude oil plummeting, US bond yields soaring, geopolitical turmoil intensified, and consumer demand in emerging markets falling. Global economic growth is expected to decline, and so on, we can see how severe the global economic development is. As the Fed raises interest rates into deep water, the reality of the contradiction is becoming more prominent, and the global panic has become more and more likely to give people a premonition of ups and downs. Here, I would like to sort out the big macro events that took place in October and look back on the past in order to better meet the future.
At 2: 00 a.m. on September 27, Beijing time, the Federal Reserve announced a rate hike. As early as September 21, the dollar opened a new wave band of gains. Since the beginning of October, the follow-up effects of interest rate increases have gradually become apparent. On October 9, the yield on the US 10-year Treasury note soared to 3.252%, the highest level since July 2011, and the yield on the 30-year Treasury note soared to 3.43%, the highest level in four years. At the same time, senior Fed officials appear almost every week to reiterate that Trump's criticism will not affect policy decisions that it is appropriate for the Fed to continue to raise interest rates gradually and that interest rates will remain "loose". So far, the Fed's rate hike in December is still a high probability event, with a probability of nearly 70%. As of the morning of the 30th, the dollar index was still at a high of 96.6.
2. Us stocks plummet
In October, U. S. stocks were surprised and threatened to collapse, and institutions are predicting that the bull market in U. S. stocks may come to an end. On October 10 and 11, US stocks plummeted for two days in a row, while Asian and European stock markets followed suit, and global capital markets fell into a panic. On the 24th, US stocks continued to plunge, with US stocks losing 8.75 trillion of their market value in one day, with technology stocks falling the most. Several technology giants generally tumbled more than 5%, becoming the most important factor in several sharp falls in US stocks. On the back of the sharp fall in US stocks, the market panic index VIX rose more than 20 per cent to its highest level in more than half a year. As of the 30th, the Dow was down 8.1%, the Na was down 12.9%, and the benchmark was down 9.7%. The year's gains have long been wiped out.
3. The collapse of oil prices
Relations between Saudi Arabia and the United States have been strained since Saudi journalists disappeared in Turkey on Oct. 2, with Trump threatening sanctions against Saudi Arabia and Saudi Arabia fighting back to push international oil prices above $200, fueling concerns about oil supplies. As Trump's attitude changed, oil prices began to fall one after another, and because of concerns about a reduction in Iranian oil production, Saudi Arabia said on the 22nd that it would increase oil supply to 11 million barrels per day, or even to 12 million barrels per day. Coupled with the fact that US crude oil EIA inventory data in October far exceeded expectations for four consecutive weeks, a strong rise in the US dollar and weaker demand in emerging markets, international crude oil prices plummeted one after another, with the largest pullback of US oil prices of 14.5 per cent.
4. Us economic data
The unemployment rate stood at 3.7% in September, up from 3.9%, the lowest level since December 1969, suggesting that the job market is extremely tight and jobs are close to saturation.
In the United States, the number of non-farm payrolls adjusted for the September quarter was 134000, compared with a previous value of 27. That could mean employers are starting to face difficulties in filling jobs, but the bright performance of the non-farm data in August partly made up for the market's disappointment over the non-farm data for September.
The US trade deficit in August was $53.2 billion, up from $500, and the trade deficit widened for the fourth month in a row, suggesting that trade could put pressure on US economic growth in the third quarter.
Us CPI rose 2.3 per cent in September from a year earlier to 2.7 per cent, while core CPI rose 2.2 per cent in September from a year earlier, suggesting that underlying inflationary pressures appear to have cooled slightly.
5. China economic data
In September, China's foreign exchange reserves totaled US $3.087 trillion, with a previous value of US $3.1097 trillion. China's foreign exchange market continued to maintain an overall stable situation, the behavior of foreign-related transactions by the main body of the market was more rational and orderly, and domestic and foreign factors played a comprehensive role. The scale of China's foreign exchange reserves is expected to remain stable in the course of fluctuations.
China's GDP rose 6.5% in the third quarter compared with the same period last year. Generally speaking, the national economy operated within a reasonable range in the first three quarters, maintaining an overall steady and steady development trend, optimizing the economic structure, and continuously improving the quality and efficiency of development.
The scale of social financing in China in September was 2.21 trillion yuan, up from 1.52 trillion yuan, mainly due to the addition of a special bond of local government to the social and financial data, and the off-balance sheet business continued to shrink due to strong financial supervision. It also led to a decline in social data before the change of caliber.
China's M2 rose 8.3% in September from a year earlier to 8.2%. The currency continues to be neutral and tight, and deleveraging is not over.
Outlook for US dollar and commodity trends:
Professor Wang Zairong, executive chairman of Beijing Rongcai Asset Management Co., Ltd., and chief futures expert of CCTV Securities and Information Channel, believes that the US dollar index will rise to US $100 in the near future, and the technical side of the US dollar has already passed the 96 mark. From a technical point of view, after the withdrawal can run to 100, the future of the RMB will fall below 7, and may eventually go to 7.2. In the near future, the possibility of the dollar returning to 95 is relatively small, the strengthening of the dollar has become the main theme, the strength of the dollar at the same time led to the decline in commodity prices, but the weakness of the RMB will lead to a moderate rise in domestic commodity prices and a reasonable decline in the stock market.
Jiang Xingchun, director of the Soochow Futures Research Institute, believes that the overall trend of the US dollar is still strong and volatile, the US economy is in good condition and the unemployment rate is relatively low, and supports the Fed's rate hike in December, so the US dollar is still expected to be volatile on the strong side.
