Daily macro market information tracking: the impact of the FOMC meeting continues to ferment, and the trend of the yield curve of the UK and the US diverges

22-11-04 16:58

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Original source: SignalPlus

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The impact of the US FOMC meeting the day before continued to ferment, and the market still fell across the board yesterday, with the S&P 500 and Nasdaq falling 1 each % and 1.7%, the 2-year U.S. bond yield approached the cycle high of 4.72%, the 10-year bond yield also rose to 4.15%, the investment grade corporate bond yield exceeded 6%, and the mortgage rate reached 7.35%. Yields were at a high of 9.2%. The current market expects that the interest rate will reach the terminal rate of 5.15% by June 2023. It seems that the market has well received and digested the Fed's message of "rising to a higher level and maintaining it longer".

In the UK, although the interest rate was raised by 75 basis points yesterday as scheduled, the forward guidance of the Bank of England is completely different from that of the Fed. Expectations, saying that "a majority of committee members judged that ... further rate hikes may be necessary ... terminal interest rates should be lower than current market expectations", the BoE's argument that the 2/30-year UK government bond yield curve is flattening. It is 11 basis points steeper, compared with the 18 basis points flattening of the US 2/30-year bond curve after the Fed's speech yesterday, it is not difficult to see the differences in the positions of the two central banks.

In terms of economic data, the US ISM non-manufacturing index fell to 54.4 in October, slightly lower than expected, with the employment index falling to 49.1, The new order index also fell to 56.5, only the payment price index rose to 70.7, 17 industries showed price growth, and 94% of the companies participating in the survey said that prices rose, of which the real estate and leasing industries had the most significant price increases, which may imply Next week's CPI data is not optimistic, after all, rising housing and rental prices are important factors driving inflation in the past two years.

There will be two important data releases in the next 7 days, and today will usher in the results of non-agricultural data (CPI on the 10th), The market expects 195,000 new jobs, an unemployment rate of 3.6%, and an annual growth rate of average hourly wages to slow to 4.7%. We don't think the results of non-agricultural data will have a great impact on the Fed's short-term policy direction. The results of JOLTS data released earlier seem to be more important, but it is recommended to pay special attention to signs of continued tightness in the labor market, which may further push up terminal interest rates .

Finally, news of massive layoffs in the technology industry continues, and Stripe will Cut 14% of manpower, Lyft plans to lay off 13%, market rumors that Twitter will cut 50%, and both Apple and Amazon have announced that most departments will freeze recruitment until next year, although this will not be reflected in this month's non-agricultural data results , but as we are about to enter the economic slowdown phase, it is recommended to continue to pay attention to relevant news.