FPG ：Retail sales in the United States hit a new low in March, PP1 slowed beyond expectations, and the Federal Reserve cut interest rates in May next year? 1. [The US dollar recorded the largest decline in a year] The US dollar recorded the largest one-day decline in the following year. Due to weak U.S. data, traders increased their bet that the Federal Reserve will start lowering interest rates by mid-2024, and U.S. Treasury yields plummeted. The inflation data released by the United States has led to a major change in the global financial market. Traders expect that the Federal Reserve’s radical interest rate hike will successfully curb the worst inflation since the 1980s. This shift in expectations has led to a decline in bond yields, reduced the motivation of overseas investors to transfer funds to the United States, and promoted the rise of risky assets such as stocks in the United States and emerging markets. Comments: The overall and core slowdown in the United States in October exceeded market expectations, and traders bet on the end of the U.S. interest rate hike cycle. 2. [Japan’s GDP contracted by 2.1% in the third quarter] Japan’s economic recovery is fragile on the 1st, and the economy in the third quarter of July and September (second fiscal quarter) is shrinking at the fastest annualization rate in two years, which also provides a reason for the Bank of Japan to continue to implement easing policies. This economic result may give the Bank of Japan a reason to delay the normalization of its monetary policy. At present, uncertainties such as weak yen, continued inflation and uncertain overseas prospects continue. Comment: For the Bank of Japan, if it withdraws from the negative interest rate policy too early, it may further aggravate the economic downturn. Pressure. 3. [The yen is still in trouble against the global currency] Driven by U.S. inflation data, the yen rose against the US dollar on Tuesday, the largest increase in four months. The data shows that the Federal Reserve may not need to raise interest rates further. The limited recovery does not reflect any changes in Japan. The Bank of Japan’s short-term policy interest rate is still below zero, and the long-term bond yield is still about 4 percentage points behind the same-term U.S. bond. The yen maintains the special status of the most pessimistic major currency, even if it is continuously added. After the interest rate, the economic situation in Europe and the United States also looks better than that of Japan, which has not increased interest rates so far. Comment: Japan’s weak GDP data means that the Bank of Japan may need to maintain a negative interest rate policy longer than expected, which is bearish for the yen. 4 [U.S. PP followed the expected decline of CPI] On November 15, data from the U.S. Department of Labor showed that under the influence of the decline in gasoline prices, the U.S. PPI in October slowed sharply from 2.2% last month to 1.3% year-on-year, far lower than the expected 1.9%: October P month-on-month It fell by 0.5%, the largest decline since April 2020, far less than the expected month-on-month increase of 0.1%, and the previous value in September was a month-on-month increase of 0.5%. Comments: Oil prices fell counterintuitively after the outbreak of the Palestinian-Israeli conflict and cooled down the United States. 5. [Retail data turned to decline] On Wednesday, November 15, the Census Bureau of the U.S. Department of Commerce announced retail sales data for October. Data shows that retail sales in the United States fell 0.1% month-on-month in October, the first decline since March this year, and slowed sharply from the previous revised value of 0.9%. Comments: Retail has declined, and the school’s PCE is not far away. The Federal Reserve will cut interest rates next year, but the key question is whether it is due to the decline in the interest rate cut or because of the recession. 6. [The Federal Reserve’s anti-compass work is far from over] Although the market now believes that interest rates have peaked and begins to look forward to cut interest rates next year, Brad, who stepped down as chairman of the St. Louis Federal Reserve in August this year, said that the work of the Federal Reserve is far from being completed. East. Brad said: “The pass has declined, and the annual rate of core personal consumption expenditure (PCE) has dropped from 5.5% to 3.7% - which is good, but it is still half way from the 2% target, so the Federal Reserve still has a long way to go.” Comments: At present, the risk of economic recession in the United States next year is only about 15%. The basic scenario should be that economic growth will remain at the trend level, while Tongyin will continue to decline, so as to achieve a “soft landing”. King, a special analyst at FPG, said: After the U.S. CPI cooled beyond expectations, the growth rate of U.S. PPI also slowed beyond expectations, and U.S. retail sales in October was also small. The decline will provide key information for the Federal Reserve before making the next interest rate decision on December 13. Since March 2022, the Federal Reserve has raised the benchmark overnight interest rate by 525 basis points to the current 5.25%-5.50% range. This is the highest interest rate since the outbreak of the financial crisis, causing pain to consumers who have already faced high-compass. Data shows that the probability of the Federal Reserve maintaining the current interest rate in December this year and January next year has been nailed, and financial markets are even expected to cut interest rates in May next year. Dawson, a special analyst at FPG, said: Economic data has left the hope of a soft landing of the economy, and the continuous conflict between Israel and Hamas has yet to have a meaningful impact on the global oil market. Therefore, the fear of oil has been slowly but steadily fading over the past month. Last week, the growth of crude oil inventories in the United States exceeded expectations, and the record level of crude oil production in the world’s largest oil-producing countries and the worrying prospects for crude oil demand in Asia have suppressed crude oil prices. By the close, the West Texas Intermediates crude oil futures delivered on the New York Mercan Exchange in December fell $160. , closed at $76.56 per barrel, down 2%; on the ICE European Futures Exchange, the global benchmark Brent crude oil price fell $1.29 to $81.18 per barrel by 1.6%. Dave, a special analyst at FPG, said: The rise of the US dollar index by 0.3% weakened the attraction of gold, while the benchmark 10-year Treasury yield rebounded after the revision of retail sales data in September. The price of gold rose by nearly 1% on the previous trading day, and the previous data showed that the United States Consumer prices remained unchanged in October. The producer price index in the United States recorded the largest decline in three and a half years in October, which is the latest sign that the pressure on accounts has eased. Yue Lin, a special analyst of FPG, said: Investors weighed corporate financial reports and economic data. At the same time, PPI recorded the largest decline since April 2020 and a small decline in retail sales, which further supported the reduction of the pressure on the accounts, and strengthened the possibility of completing the interest rate hike and radical interest rate cuts next year. The Dow Jones index rose 163.51 Point, an increase of 0.47% to 34991.21 points; S&P The 500 index rose 9.30 points, an increase of 0.21% to 4505.00 points; the Nasdaq Composite Index rose 9.45 Point, an increase of 0.07% to 14103.84 points. The above analysis is only for the views of market researchers and is for reference only and is not Regarded as a specific investment suggestion. #Forex #trading #tradingforex