SignalPlus Macro Research Report (20230920): The market is waiting for the FOMC meeting

On the eve of the FOMC meeting, the market made final adjustments, with some companies rushing to issue new bonds at the last moment. In addition, the market finally showed some (belated) concerns about the rising dot plot and the hawks suspending interest rate hikes. The United States was fixed Earnings yields are up about 5-6 basis points.

The inflation data released by Canada yesterday was less friendly. In August, the core CPI rose sharply, with the growth rate being the highest since July 2022. At the same time, the price of second-hand cars in the United States also unexpectedly increased by 1.5% month-on-month. WTI crude oil prices were still higher than With $90 and little sign of easing, we think the risk of a rebound in inflation before the end of the year remains, giving the almost-forgotten “rates higher for longer” view a chance to make a comeback.

Additionally, while the non-farm payrolls data showed early signs that the tight job market is starting to slow, micro data has begun to diverge recently as big tech companies resume hiring, with Salesforce recently saying it would be hiring in sales and engineering. 300 employees, Amazon also announced that they will hire 250,000 employees this holiday season, an increase of 67% from 2022, and wages have also increased significantly to $20.5 per hour. Even Meta seems to be making a comeback. According to Bloomberg, the company has resumed operations benefits, and providing return hiring for previously unemployed employees, once again showing the surprising resilience of the U.S. technology industry.

Diverging outlooks for monetary policy have led to sharp gains in the dollar over the past two months, and it is now facing strong technical resistance to a near-term reversal. The yen and yuan have been relatively lagging against the dollar during this move, and central bank officials have taken action Verbal intervention as a short-term strategy to stop one-way moves.

*KANDA: Watch the foreign exchange situation with urgency

*JAPANS KANDA: Maintaining close ties with the U.S. Treasury Department

*KANDA: U.S. and Japan share same view on excessive movements

In terms of cryptocurrencies, prices rebounded slightly, with BTC breaking through $27,000 and ETH rising to around $1,650 again. There was still little news affecting the market, but we noticed that the correlation between BTC and SPX and gold spot prices has quietly returned to this year. Highs, therefore, we expect cryptocurrencies to move in line with stocks and bonds at todays FOMC meeting, and if the Fed shows an unexpected hawkish bias, it will be a negative outcome for the market and may cause prices to swing lower again. I wish you all good luck with your trading today!

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