SignalPlus Macro Research Report (20231006): U.S. bond yields rose, and crypto market financing hit a three-year low
This week, China and Hong Kong are still on their Golden Week holidays. The biggest news on the macro front is the surge in global yields, with the 30-year U.S. bond yield hitting 5% and the 10-year German Bund yield hitting 3%. The yield on future Japanese government bonds also exceeded 80 basis points.
Over the past week, several officials from the Federal Reserve and the European Central Bank have issued hawkish comments, emphasizing that the last leg of inflation will be the most difficult to deal with and continuing to say that any expectations for policy easing are premature. However, What really triggered the taper tantrum-style surge in bond yields in mid-week was actually the result of strong economic data. In addition to the U.S. ISM manufacturing index being better than expected, the rebound in JOLTS data shocked the market and triggered risk aversion. In August The number of job vacancies rebounded to 9.61 million, much higher than the expected 8.815 million, raising the possibility of a rate hike in November to more than 30% and dragging down the 10-year yield to rise by 12 basis points on Tuesday. The SPX index also fell that day. 1.3%.
Since then, risk markets have stabilized, with ADP employment growth slowing sharply in September (+89,000, lower than expected +158,000), and Eurozone retail sales data lower than expected (-1.2% month-on-month vs. -0.5% expected) ), Citis US credit card data fell (-1.3% month-on-month in the first two weeks of September), and crude oil futures fell 12%, helping bonds temporarily stop the decline. However, in contrast to the past 24 months, the Fed (policy tightening) Different from the driven decline, the current yield movement is driven by a steep bearish trend, with the 2/10s curve reversing back to levels not seen in more than a year. Although the Federal Reserves interest rate hikes are nearing the end, considering that inflationary pressures will continue for a long time Yes, 15 years of zero interest rate/quantitative easing excess was quickly corrected, with investors now demanding higher yield premiums and discount rates.
The return of high financing rates will have a profound impact on macro assets. Young investors are entering a world with a risk-free interest rate of 5% that they have never imagined before; concerns about portfolio losses caused by rising interest rates have caused bank stock prices to rise in the past It fell nearly 9% last month, with paper losses on banks held-to-maturity portfolios estimated at nearly $400 billion, while 10-year bond yields exceeded SPX implied yields for the first time since the early 2000s, even on the once-hot The private equity space, in terms of executed deal volume, has also plummeted to 2020 levels, with soaring financing rates severely limiting financing options and exit assumptions for the foreseeable future.
As expected, the pressure on capital has spread to the cryptocurrency field, with the industrys financing amount hitting its lowest level since the end of 2020. In addition, valuation and how to exit have become the focus again, with about 90% of financing transactions in the seed round financing stage. or earlier, and despite regulatory resistance, investors are still primarily from the United States.
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