SignalPlus Macro Review (20230525)

Dear friends, welcome to the SignalPlus macro research report. SignalPlus macro research reports update macro market information for you every day, and share our observations and opinions on macro trends. Welcome to track and subscribe, and follow the latest market trends with us.

Dear friends, welcome to the SignalPlus macro research report. SignalPlus macro research reports update macro market information for you every day, and share our observations and opinions on macro trends. Welcome to track and subscribe, and follow the latest market trends with us.U.S. stocks continued to fall for most of yesterday, with SPX futures retreating to recent lows around 4115,, the impasse over the debt ceiling, recent stop losses on new long positions and a quiet pickup in interest rates have brought persistent negative sentiment to the market.

However,However,Nvidia saves the market at the close, the company's earnings results were extremely impressive and met the market's high expectations for AI. Its stock rose about 30% after hours and had single-handedly lifted the S&P 500 index by about 0.8% when it entered the Asian open; Nvidia's revenue hit $7.19 billion in the first quarter,Second-quarter sales expected to hit $11 billion, beating Wall Street forecasts by 50%

, net income also rose to $2.04 billion from $1.62 billion a year ago; in addition to strong chip sales, the company also cited a "surge in demand" for their data center products as the current insatiable demand for AI services has increased. reduce.Back to the macro level,UK overall CPI annual growth rate of 8.7%, higher than market expectations of 8.2%, another rude reminder to the market that inflation problems still exist

, forcing interest rate market pricing to start pricing in the possibility of a 50bps rate hike by the BoE again (the June MPC meeting priced in around 30bps). Elsewhere, the U.S. Department of Energy reported that crude oil inventories fell by a record 6-month high of 12.46 million barrels (a rise of 700,000 barrels was expected), sending crude oil futures up about 5% in 48 hours, slightly fueling concerns about a recovery in inflation .On the American side,Fed Governor Waller (voting) further added fuel to the inflation flames, saying he was concerned about the lack of progress on inflation and that he "does not support a halt to rate hikes unless there is clear evidence that inflation is falling toward the 2% objective", in addition, even ifIn the event of a "skip rate hike" in June, "prudent risk management would recommend skipping a rate hike at the June meeting."

• , but based on upcoming inflation data, may favor a rate hike in July.” Then, the Fed’s May meeting minutes followed up with some notable hawkish comments:Inflation is too slow to come down.“Participants said that data through March showed that inflation, particularly measures of core inflation, had fallen more slowly than expected, although core commodity inflation had moderated since the middle of last year,But the slowdown has been slower than expected in recent months.Furthermore, participants emphasized that

• Core non-housing services inflation has shown little sign of slowing over the past few months. "

• Inflation risks remain skewed to the upside. "Almost all officials see upside risks to the inflation outlook."Tighter credit conditions could also lead to higher prices. “…some participants suggested that tighter credit conditions might not put much downward pressure on inflation, in part because

• A reduction in the supply of credit can limit aggregate supply and aggregate demand. "forward selectivity.

"Many participants emphasized the need to preserve selectivity after this meeting."

Combined with the recent string of strong consumer earnings results (A&F, Ubran Outfitters, VF Corp, Starbucks, Chiptole, McD, and Toll Brothers), both nominal and real yields have resumed their upward trend, while the forward market remains based on A recession is too likely and a rate cut is expected to occur.Finally, just before the Asian open, ratings agenciesFitch decides to preemptively place U.S. on negative rating watch list, even though they expect the debt ceiling issue to be resolved by X-Date, said the US' AAA rating could be downgraded. Since Congress has so far failed to make any significant progress in resolving the matter,

Yields on T-bills that mature just after June 1 have jumped more than 7%, while spot yields are only around 5%.Cryptocurrency prices are still in a tailspin, with BTC and ETH volatility remaining stagnant. Barring an unexpected technical default in the U.S., we remain cautious on cryptocurrency price action and will, we do not expect any significant rebound in BTC until the terminal interest rate falls back significantly, however, based on the resilience shown by the current economy, a rate cut is unlikely to occur.

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