SignalPlus Macro Research Report (20230906): Crypto Market Enters Freezing Period
The U.S. bond market returned from the long weekend, and although the corporate bond boom led to an increase of about 8 basis points in the yield curve, the trading volume was slightly flat (70% of the normal level); yesterday, 16 institutions issued new bonds, marking the beginning of the busiest bond issuance week of the year. Investment banks expect the new bond supply this week to reach $50 billion, and a total of $120 billion in September. It is expected that this wave of issuance will be concentrated in the short term, and due to the issuer's attempt to lock in financing before the CPI data next Wednesday, the yields face upward pressure.
Speaking of the pressure on bond yields, the decision of OPEC+ member countries to extend production cuts until the end of the year has driven crude oil prices to soar above $87 for the first time in nearly a year. Saudi Arabia will continue to reduce daily production by 1 million barrels until December. This move caught the commodity market off guard, with daily total production falling to 9 million barrels, the lowest level in years; soaring oil prices, coupled with the rise in ISM payment prices last Friday (48.4 vs 42.6), have raised concerns that the trend of slowing inflation may be coming to an end, and there may be upward risks to inflation next year.
The rising cost of living and stagnant wages are the themes of the strike launched by the United Auto Workers (UAW), which has 150,000 members, against the three major automakers in Detroit (GM, Ford, Stellantis). This is the most serious labor unrest in decades. The existing labor contracts will expire on September 14th. UAW leader Shawn Fain threatened that if no agreement is reached in time, strikes will be launched against the three automakers simultaneously. Union workers first made demands, including reducing the weekly working hours to 32 hours and increasing the hourly wage by 46% in the next four years. As expected, since July, concerns about strikes have put pressure on automaker stocks. If the negotiations reach a deadlock, it may further hinder overall market sentiment.
In terms of cryptocurrencies, the price is still in a dormant state, and multiple indicators show market indifference (including trading volume and price volatility, and Google search trends are at a low point in years). There has been a capital outflow from listed products on exchanges, with an outflow of about 8 million dollars last week. In addition, from a seasonal perspective, August is the most difficult month for BTC, and the recent trend of the U.S. dollar breaking through the trend channel (due to the rise in real interest rates) may further hinder the price in the short term. Please pay attention to safety!
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