SignalPlus Macro Research Report (20230929): The U.S. job market is performing strongly, and high interest rates are likely to remain high for a long time.
The market finally saw some small rebound, with SPX rising by about 0.6% and Nasdaq rising by nearly 1%; bond yields showed a bullish trend, with the 2-year yield rising by 6.5 basis points, while the 5-year CDS tightened by about 5 basis points. , USD/JPY held steady at just below 150.
In terms of economic data, the number of initial jobless claims in the United States once again reminds us that the U.S. job market is still at a tight level, with the number of people hovering at 204,000, which is one of the strongest (lowest) levels this cycle; regarding job market pressure Any comments of weakening are actually based on current levels being at record highs, which explains why the Feds rhetoric remains firm in favor of higher rates for longer.
In terms of foreign exchange, despite repeated calls for de-dollarization over the past year, the U.S. dollar index has remained at its high point during the year. An interesting data from SWIFT shows that the proportion of using the U.S. dollar as the settlement currency has surged to a ten-year high of 48%. , this trend is actually de-euroization. The share of the euro in settlement has dropped from a high of about 45% to 23% today. The use of RMB has steadily increased, but is still at an extremely low level. At 3.5%, the current situation refutes those who claim that the US dollar is about to collapse.
Although Chinese stocks listed in the United States had good gains yesterday, Hong Kong and Chinese stock markets will enter the Mid-Autumn Festival and National Day holidays under the haze of real estate. Evergrande announced yesterday that its founder was taken compulsory measures by the government for suspected violations of the law. Other domestic developers continue to face debt repayment difficulties; the Hang Seng Index fell by about 8% in the third quarter, and the real estate index fell by more than 17%. It has fallen for three consecutive quarters. Local investors must hope that after the holidays, Better market conditions are ahead.
Speaking of better market conditions, Q3 funding data showed diverging fortunes across sectors, with the number of startup closures/failures at a multi-year high and private credit (loan) funds seeing their best funding ever Raising results; With the end of the era of quantitative easing, interest rates are expected to remain high in the foreseeable future, and capital will flow to savings instruments or other interest-bearing instruments. The impact of high interest rates on investment mentality will be far-reaching, but these effects may not come until It won’t be fully realized until 2024.
Next, our daily macro research report will be suspended for a few days and will return next Friday. I wish you all a wonderful holiday!
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