8. 제롬 파월은 과거의 실패를 답습하지 않고자 인플레이션을 통제하기 위해 무엇이든 다 하겠다는 수사적 확신(rhetorical commitment to do whatever it takes to tame inflation)을 전하고 있지만, 실제 정책은 아서 번스보다 더 완화적이며 인플레이션이 하락하길 바라는 '운'에 맡기는 점진주의를 취하고 있음. 이는 많은 사람들이 생각하는 것보다 이번 중앙은행이 1970년대의 오류를 다시 한 번 반복할 위험이 매우 크다는 것을 의미함. 우리는 중앙은행이 너무 적게 금리를 올리는데 주의해야 함(should pay more attention to the risk that the Fed does too little).
Bottom-line: 역외 위안화가 달러 대비 0.8% 약세, 중국에 대한 위험선호로 여겨지는 호주 달러가 1% 이상 약세를 보이며 변동성이 높을 한 주를 예상케 함. 지난 주 중국이 바이러스 확산 억제 정책을 해제하려는 움직임에 대한 베팅이 이어졌지만 질병예방통제국은 토요일에 현재의 정책이 완전히 옳은 해법임이 증명되고 있다며 확고하게 정책을 유지할 것이라 밝힘. 골드만삭스는 모든 준비가 완료될 때까지 현행대로 유지하면서 이 정책을 해제하고 경제를 개방하는 시기는 내년 2분기 정도가 될 것으로 예상함.
The yuan dropped at the start of what may be another volatile week for Chinese markets after health officials vowed to “unswervingly” stick to a Covid Zero approach, damping optimism that Beijing was working toward easing restrictions. The offshore yuan dropped 0.8% to 7.24 per dollar, unwinding some of Friday’s 2% surge. The Australian dollar -- a China-risk proxy -- fell over 1%, while the greenback advanced on haven demand. “Previous practices have proved that our prevention and control plans and a series of strategic measures are completely correct,” said Hu Xiang, an official at the National Health Commission’s disease prevention and control bureau. The comment is the latest from government officials to back a strict adherence to China’s reliance on lockdowns and mass testing to stamp out infections. The approach has weighed on the economy, which in turn has dragged on financial markets. Goldman Sachs Group Inc. said China has given some signs of a potential exit from Covid Zero, such as trying to alleviate public fears of the coronavirus and other medical preparations. However, “the government still needs to keep its zero-Covid policy until all preparations are done,” economists including Hui Shan wrote in a note. That may take months, according to Goldman, which expects a reopening in the second quarter of next year.
The yuan dropped at the start of what may be another volatile week for Chinese markets after health officials vowed to “unswervingly” stick to a Covid Zero approach, damping optimism that Beijing was working toward easing restrictions. The offshore yuan dropped 0.8% to 7.24 per dollar, unwinding some of Friday’s 2% surge. The Australian dollar -- a China-risk proxy -- fell over 1%, while the greenback advanced on haven demand. “Previous practices have proved that our prevention and control plans and a series of strategic measures are completely correct,” said Hu Xiang, an official at the National Health Commission’s disease prevention and control bureau. The comment is the latest from government officials to back a strict adherence to China’s reliance on lockdowns and mass testing to stamp out infections. The approach has weighed on the economy, which in turn has dragged on financial markets. Goldman Sachs Group Inc. said China has given some signs of a potential exit from Covid Zero, such as trying to alleviate public fears of the coronavirus and other medical preparations. However, “the government still needs to keep its zero-Covid policy until all preparations are done,” economists including Hui Shan wrote in a note. That may take months, according to Goldman, which expects a reopening in the second quarter of next year.
Bottom-line: 중국의 제한 정책 고수와 기업 이익 추정치 악화, 개별 기업의 악재를 생각하면 오늘 주가가 하락해야 했다고 의아해 할 것임. 반대로 중간선거는 저가 매수를 대기하는 사람들에게 촉매가 될 수도 있기에 하루 하루 주가 예측이 힘듬. 이런 때 우리는 실질금리를 살펴 볼 필요가 있는데, 최근 5년물 실질금리는 9월 FOMC 이후 갈피를 잡지 못하고 묶여있음. 이는 지난 6월에서 7월 약세장 랠리가 발생했을 때와 같음. 향후 정책 경로 상 중앙은행이 8월처럼 가파르게 실질금리를 끌어올리긴 힘들테고, 이는 주식시장 낙관론자에게 힘을 줄 것임. 다만, 경기와 기업 이익이 지나치게 축소 될 경우 2000년도에서 2002년까지 5년물 실질금리가 4%에서 1.25%로 하락할 동안 보았던 큰 폭의 시장 저점을 맞이할 수도 있음. 심지어 이 저점은 2003년 3월에 한 번 더 시험을 받음. 실질금리는 이처럼 퍼즐의 한 조각이지만, 단기로는 적어도 시장 방향 판단에 도움이 되고 있음.
It’s a little surprising to see stock markets shrug off the reiteration of China’s Covid-zero policy, particularly when hopes of its demise helped to fuel last Friday’s rally. Add in downward earnings revisions and some bad company-specific news in the tech sector, and there is every reason to think that the stock market should be lower today. On the flip side, midterm elections Tuesday perhaps provide another catalyst for dip-buyers to anchor upon, and in any case trying to predict the price action on a day-to-day basis has been pretty tough recently. At least the equity rally lines up with the dollar dropping (well, excluding USD/China, naturally) given the correlations at play this year. While nominal US rates near the front of the curve remain near their highs, it’s worth noting that 5-year real rates have pretty much gone nowhere since a week after the September Fed meeting. That price action is virtually identical to that observed in the second half of June and July, which helped fuel that biggest bear-market bounce of the year so far. Obviously, the further we go in the policy cycle, the less likely it becomes that we see a Fed-induced surge in real yields like that observed starting in August. That’s a plus for equity optimists. On the flip side, if the economy and earnings are weak enough, it very well might not matter what real yields do. Starting in 2000, for example, five-year real yields dropped from 4% to 1.25% before the market eventually bottomed in October 2002. In fact, they went even lower as the SPX re-tested those lows in March of 2003. So while the yield backdrop is an important part of the puzzle, it is still only a piece. Still, in the short run keeping an eye on those real yields has been helpful in knowing whether we are trading the larger bear market trend or the tactical bullish one.
It’s a little surprising to see stock markets shrug off the reiteration of China’s Covid-zero policy, particularly when hopes of its demise helped to fuel last Friday’s rally. Add in downward earnings revisions and some bad company-specific news in the tech sector, and there is every reason to think that the stock market should be lower today. On the flip side, midterm elections Tuesday perhaps provide another catalyst for dip-buyers to anchor upon, and in any case trying to predict the price action on a day-to-day basis has been pretty tough recently. At least the equity rally lines up with the dollar dropping (well, excluding USD/China, naturally) given the correlations at play this year. While nominal US rates near the front of the curve remain near their highs, it’s worth noting that 5-year real rates have pretty much gone nowhere since a week after the September Fed meeting. That price action is virtually identical to that observed in the second half of June and July, which helped fuel that biggest bear-market bounce of the year so far. Obviously, the further we go in the policy cycle, the less likely it becomes that we see a Fed-induced surge in real yields like that observed starting in August. That’s a plus for equity optimists. On the flip side, if the economy and earnings are weak enough, it very well might not matter what real yields do. Starting in 2000, for example, five-year real yields dropped from 4% to 1.25% before the market eventually bottomed in October 2002. In fact, they went even lower as the SPX re-tested those lows in March of 2003. So while the yield backdrop is an important part of the puzzle, it is still only a piece. Still, in the short run keeping an eye on those real yields has been helpful in knowing whether we are trading the larger bear market trend or the tactical bullish one.
Bottom-line: 성장 둔화, 인플레이션 완화, 그리고 기술 업종의 감원과 신규 채용 중단이 투자자들로 하여금 중앙은행이 보다 완화적일 수 있단 기대를 주고 있음. 하지만 실제 데이터는 다를 수 있음. 애플, 메타, 트위터가 고용을 축소하고 있지만 이들이 속한 정보 서비스 부문은 미국 고용의 2%에 불과함. 또한 기술주가 주가지수에서 차지하는 비중은 크지만, 서비스/운송/여가 등의 사업이 지배적으로 실물경제를 충분히 반영하지 못함. 오토매틱데이터프로세싱(ADP)에서 발표하는 지표는 설문이 아닌 실제 지급 데이터에 기반하는데, 이에 따르면 고용시장은 여전히 강한 수요가 이끌고 있음. 이직한 사람은 15%의 급여를 인상해 남아있는 사람의 중앙값인 7.7% 인상 대비 높았음. 뱅크오브아메리카는 고용 데이터 이후 중앙은행의 최종 정책금리를 4.75%~5%에서 5%~5.25%로 올렸으며, 이처럼 수요가 탄력적인 고용시장은 중앙은행을 보다 강경하게 만들 수 있음.
Signs of slower growth, cooler inflation (including collapsing used car prices) and a spate of tech-sector layoffs are adding to optimism the Fed can soon shift toward a more dovish stance, underpinning equities. Yet many labor market signals show plenty of reasons rates can stay higher for longer. Companies like Apple, Meta, and Twitter are drawing attention with plans to shed thousands of jobs and freeze hiring. But information services accounts for a mere 2% of total US employment, ADP’s chief economist Nela Richardson tells me. Tech makes up a big chunk of the S&P 500, but not the real economy, where support services, transportation, leisure and hospitality dominate. October data from ADP underscored the resilient demand for workers. Plus, people who changed jobs got 15% pay increases from a year ago, while the median increase in annual pay was 7.7% for those staying at a job. ADP’s data is based on actual payroll numbers, not surveys, as is the case with BLS data -- which also showed strong hiring and wage increases in October, along with a higher unemployment rate. JOLTS job openings numbers had unexpectedly rebounded in September. On Friday, economists at BofA looked at what they saw as “solid” employment gains and decided to lift their terminal rate forecast to 5%-5.25% from a prior 4.75%-5%. A tight labor market can keep the Fed on a hawkish path.
Signs of slower growth, cooler inflation (including collapsing used car prices) and a spate of tech-sector layoffs are adding to optimism the Fed can soon shift toward a more dovish stance, underpinning equities. Yet many labor market signals show plenty of reasons rates can stay higher for longer. Companies like Apple, Meta, and Twitter are drawing attention with plans to shed thousands of jobs and freeze hiring. But information services accounts for a mere 2% of total US employment, ADP’s chief economist Nela Richardson tells me. Tech makes up a big chunk of the S&P 500, but not the real economy, where support services, transportation, leisure and hospitality dominate. October data from ADP underscored the resilient demand for workers. Plus, people who changed jobs got 15% pay increases from a year ago, while the median increase in annual pay was 7.7% for those staying at a job. ADP’s data is based on actual payroll numbers, not surveys, as is the case with BLS data -- which also showed strong hiring and wage increases in October, along with a higher unemployment rate. JOLTS job openings numbers had unexpectedly rebounded in September. On Friday, economists at BofA looked at what they saw as “solid” employment gains and decided to lift their terminal rate forecast to 5%-5.25% from a prior 4.75%-5%. A tight labor market can keep the Fed on a hawkish path.
Bottom-line: BYE-NANCE.
Changpeng “CZ” Zhao walked away from his bailout for Sam Bankman-Fried’s FTX.com almost as quickly as he offered a rescue. “Our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help,” Binance, the crypto exchange founded by Zhao, said in a statement. An FTX spokesperson declined to comment.
Changpeng “CZ” Zhao walked away from his bailout for Sam Bankman-Fried’s FTX.com almost as quickly as he offered a rescue. “Our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help,” Binance, the crypto exchange founded by Zhao, said in a statement. An FTX spokesperson declined to comment.
Bottom-line: 11월 초기에 몰려있는 대형 사건들인 중앙은행, 고용, 선거, 그리고 물가, 그 중 오늘이 마지막 차례인 물가지표 발표일임. 지난 달의 물가지표는 우리가 예상치의 상회와 하회에 주목하는 것보다 실질금리를 살펴보는 것이 더 필요하다는 것을 알려줌. 주식시장의 반등을 주도 한 몇 가지 요인들이 사라진 와중에 실질금리는 여전히 일정한 범위 안에서 움직이고 있는데, 지난 번 시기 인플레이션 발표에도 실질금리가 전혀 오르지 않으면서 이미 주식시장이 크게 반응하지 않을 것이란 사실을 알려주었기 때문임. 물가지표 발표 후 실질금리 움직임을 추적하며 대응할 필요가 있음.
No prizes for guessing what today’s focus will be, the last leg of the four scheduled major market catalysts (Fed, NFP, and midterms being the others) in the first half of the month. As it turns out, the cryptosphere has added a fifth driver of the market narrative (or sentiment), but for this morning the focus is squarely on the inflation reading. To some extent, I’m not sure how much insight there is to provide ahead of time. Market pricing for the y/y print on headline (via the CPI fixing market) is pretty close to the consensus estimate, though it is worth noting that there is some bias to the forecast monthly changes. The expectation is tilted to the upside in terms of the monthly change in headline (the average forecast is 0.62% versus a median of 0.6%), while the opposite is the case for core-- the average forecast is 0.47% (with 24 respondents forecasting 0.4%) versus the median of 0.5% (with 32 economists predicting this reading.) Last month provided an illustration of how the obvious market reaction isn’t necessarily the correct one at the end of the day, though one might say that some of the factors that drove the extraordinary equity bounce (positioning, earnings hope, Fed and election narratives) have dissipated to a significant extent. Real yields remain fairly range-bound, so one thing to watch will be how they react to a surprise print -- the failure of real yields to rise in the face of last month’s inflation release perhaps provided an early warning signal that equities might not react as one would expect.
No prizes for guessing what today’s focus will be, the last leg of the four scheduled major market catalysts (Fed, NFP, and midterms being the others) in the first half of the month. As it turns out, the cryptosphere has added a fifth driver of the market narrative (or sentiment), but for this morning the focus is squarely on the inflation reading. To some extent, I’m not sure how much insight there is to provide ahead of time. Market pricing for the y/y print on headline (via the CPI fixing market) is pretty close to the consensus estimate, though it is worth noting that there is some bias to the forecast monthly changes. The expectation is tilted to the upside in terms of the monthly change in headline (the average forecast is 0.62% versus a median of 0.6%), while the opposite is the case for core-- the average forecast is 0.47% (with 24 respondents forecasting 0.4%) versus the median of 0.5% (with 32 economists predicting this reading.) Last month provided an illustration of how the obvious market reaction isn’t necessarily the correct one at the end of the day, though one might say that some of the factors that drove the extraordinary equity bounce (positioning, earnings hope, Fed and election narratives) have dissipated to a significant extent. Real yields remain fairly range-bound, so one thing to watch will be how they react to a surprise print -- the failure of real yields to rise in the face of last month’s inflation release perhaps provided an early warning signal that equities might not react as one would expect.
Bottom-line: 중앙은행이 정책금리를 결정하기 전에 또 한 번의 물가지표가 남았지만, 우선 시장은 안도함.
We have another CPI report before the Fed’s next policy meeting, but at this point it wouldn’t be surprising if we start to see Fed policymakers shift toward slowing the pace of rate hikes to 50 basis points from 75.
We have another CPI report before the Fed’s next policy meeting, but at this point it wouldn’t be surprising if we start to see Fed policymakers shift toward slowing the pace of rate hikes to 50 basis points from 75.
Bottom-line: 폴 크루그먼은 중앙은행이 해야 할 일을 충분히 했기에, 이제 멈춰서 금리인상이 경제에 미치는 영향을 지켜봐야 한다 주장함. 이는 미국인들의 장기와 단기 물가 예상이 오른 것과 달리 시장 추정을 하회하는 물가지표가 발표 된 뒤 한 말임. 1980년대 이후 물가를 통제하기 위해 가장 공격적인 금리인상을 하는 중앙은행에 그는 물가가 현재가 아닌 지난날을 알려줄 뿐이며, 그는 물가로 무슨 일이 발생하는지 판단하는 것을 개인적으론 이제 중단했다고 밝힘.
Nobel laureate economist Paul Krugman sees good reasons for the Federal Reserve to consider pausing its interest-rate increases to assess the effects of its hikes on the US economy so far this year. “My view is that the Fed has probably done enough already, and that they really, really should pause and wait to see,” Krugman said Friday on “Balance of Power” with David Westin on Bloomberg Television. “If we get another good CPI report, then there’s going to be a lot of soul-searching at the Fed, saying, ‘are we really being way too hawkish?’”. Krugman spoke a day after a government report showed that the consumer price index rose by less than forecast last month, fueled by declines in the price gauges of medical care services and used vehicles. Meanwhile, a separate report out Friday showed an increase in Americans’ short- and long-term inflation expectations. The Fed has embarked on the most aggressive tightening cycle since the 1980s this year in an effort to tame decades-high inflation. The central bank raised interest rates by 75 basis points for a fourth straight time last week, but is expected to moderate the pace of hiking as soon as next month following the cooler-than-expected inflation report. “The number you see for inflation is in many ways a portrait of where the economy was last winter, not a portrait of where the economy is now, and where the economy is now is probably a lot more favorable,” said Krugman, now at the City University of New York. “I have largely given up personally on using the CPI to judge what’s going on at all.”
Nobel laureate economist Paul Krugman sees good reasons for the Federal Reserve to consider pausing its interest-rate increases to assess the effects of its hikes on the US economy so far this year. “My view is that the Fed has probably done enough already, and that they really, really should pause and wait to see,” Krugman said Friday on “Balance of Power” with David Westin on Bloomberg Television. “If we get another good CPI report, then there’s going to be a lot of soul-searching at the Fed, saying, ‘are we really being way too hawkish?’”. Krugman spoke a day after a government report showed that the consumer price index rose by less than forecast last month, fueled by declines in the price gauges of medical care services and used vehicles. Meanwhile, a separate report out Friday showed an increase in Americans’ short- and long-term inflation expectations. The Fed has embarked on the most aggressive tightening cycle since the 1980s this year in an effort to tame decades-high inflation. The central bank raised interest rates by 75 basis points for a fourth straight time last week, but is expected to moderate the pace of hiking as soon as next month following the cooler-than-expected inflation report. “The number you see for inflation is in many ways a portrait of where the economy was last winter, not a portrait of where the economy is now, and where the economy is now is probably a lot more favorable,” said Krugman, now at the City University of New York. “I have largely given up personally on using the CPI to judge what’s going on at all.”
Bottom-line: 중국 당국은 은행들이 채권과 연계 된 금융상품에서 대규모 인출이 발생할 때 이에 응할 수 있는 충분한 유동성을 확보하고 있는지 보고토록 지시했음. 이는 10조 달러 규모의 중국 주식시장이 바이러스 억제 정책 완화, 부동산 지원, 서방 국가와의 긴장 완화 등 일련의 움직임이 이어지는 가운데 큰 폭으로 상승하면서 발생한 안전자산에서 위험자산으로의 급격한 자금 이동 때문임. 이 기간 동안 최고 등급의 회사채의 금리조차 급등했음.
Chinese regulators asked banks to report on their ability to meet short-term obligations after a rapid selloff in bonds triggered a flood of investor withdrawals from fixed-income products, according to people familiar with the matter. The unscheduled regulatory queries coincided with the biggest decline in China’s short-term government debt since mid-2020. The slump -- spurred by a shift toward riskier assets including stocks -- prompted retail investors to pull money from wealth-management products, fueling a spiral of price declines and accelerating withdrawals. Losses also spread to top-rated corporate bonds, stoking a record surge in yields this week. This week’s turbulence is an unexpected side-effect of growing economic optimism. China’s $10 trillion stock market has soared in recent days after President Xi Jinping’s government eased some of its strict Covid Zero policies, rolled out a rescue package for the property sector and moved to cool tensions with the US and other western nations. With money flowing into shares and other economically sensitive investments, safe haven bets on government bonds have suffered. “The slump in bond market lately has caused some retreat in mark-to-market value in some of the wealth management products,” Bank of China Ltd.’s wealth management unit said in a statement on Wednesday. “The PBOC’s monetary easing has trailed expectations, which tightened liquidity condition and pushed money market rates higher, while the adjustments in property and Covid policies to support economic growth have also lifted sentiment.”.
Chinese regulators asked banks to report on their ability to meet short-term obligations after a rapid selloff in bonds triggered a flood of investor withdrawals from fixed-income products, according to people familiar with the matter. The unscheduled regulatory queries coincided with the biggest decline in China’s short-term government debt since mid-2020. The slump -- spurred by a shift toward riskier assets including stocks -- prompted retail investors to pull money from wealth-management products, fueling a spiral of price declines and accelerating withdrawals. Losses also spread to top-rated corporate bonds, stoking a record surge in yields this week. This week’s turbulence is an unexpected side-effect of growing economic optimism. China’s $10 trillion stock market has soared in recent days after President Xi Jinping’s government eased some of its strict Covid Zero policies, rolled out a rescue package for the property sector and moved to cool tensions with the US and other western nations. With money flowing into shares and other economically sensitive investments, safe haven bets on government bonds have suffered. “The slump in bond market lately has caused some retreat in mark-to-market value in some of the wealth management products,” Bank of China Ltd.’s wealth management unit said in a statement on Wednesday. “The PBOC’s monetary easing has trailed expectations, which tightened liquidity condition and pushed money market rates higher, while the adjustments in property and Covid policies to support economic growth have also lifted sentiment.”.