Is the Fed's "Eagle Sound" just the beginning? These risk events are coming this week, or will determine the direction of the Fed's monetary policy

time:2023-01-28 07:09:24 author:Individual stock analysis
Is the Fed's "Eagle Sound" just the beginning? These risk events are coming this week, or will determine the direction of the Fed's monetary policy

Last Friday, Federal Reserve Chairman Powell delivered an unexpectedly brief speech under the global gaze. Although Powell only took 8 minutes to give a speech, it quickly extinguished the market's optimism, and U.S. stocks also ended the week with a slump. trend. Federal Reserve Chairman Powell said at the Jackson Hole Global Central Bank Annual Conference: Monetary policy cannot be eased too early, and also said that the decision to raise interest rates in September will depend on data, and believes that high interest rates that are restrictive to economic growth may be maintained for a period of time. Level. After Powell’s speech, expectations for a rate hike in September quickly increased. The CME Group’s (CME) interest rate watch tool Fed Watch shows that the market expects that the probability of the Fed raising interest rates by 75 basis points in September has soared to more than 70%, and the probability of a 50 basis point increase is less than 30%. Before Powell's speech, the odds of a 75 basis point hike were only 46.5%. Source: CME Group The "Eagle Voice" of the Federal Reserve may be just the beginning. Looking ahead to this week, it will be a week of increased financial market volatility. What events should investors pay close attention to?

The last non-agricultural report before the Fed meeting in January and September is coming.

On Friday, September 2, the United States will announce the new non-agricultural employment and unemployment rate in August, which will be September The last non-farm payrolls report before the Fed meeting on interest rates. Economists expect U.S. nonfarm payrolls to increase by 290,000 in August, down nearly half from 528,000 the previous month, but still in a strong growth range, underscoring the durability and strength of the labor market. In addition, the unemployment rate is expected to remain at 3.5% - unchanged from a five-year low - while average hourly earnings are likely to rise again solidly. According to market views, the impact on the market after the announcement of the non-agricultural data is almost predictable: poor non-agricultural data will not affect the progress of the Fed’s rate hike, but will only have an immediate impact on the market; good non-agricultural data may further push the market. Expected to raise interest rates. In addition, before the release of the non-farm payrolls report, that is, on Wednesday, August 31, the ADP data known as "small non-farm payrolls" will be the first to explore the way. At that time, the market may be able to find clues about the trend of Friday's non-farm payrolls report from the data. On June 30, American automatic data processing company ADP and the Stanford Digital Economy Laboratory announced that in order to provide a more robust and high-frequency labor market and economic growth forecast report, the current compilation method of ADP employment data report will be improved. Therefore, the small non-farm ADP employment data report for July will be suspended, and the new version of the report is scheduled to be released on August 31.

2. Fed officials will make frequent appearances and continue to evaluate the path of interest rate hikes in September

Except for Monday, Fed officials will deliver speeches every day this week, from which investors will look for the path for the Fed to raise interest rates in September. The Fed's hawkish rhetoric has grown louder in the past few days, but the market has barely listened to it. By last Friday, Powell issued the strongest "eagle" and dealt a heavy blow to the market. Capital Economics Economist Michael Pearce: Powell's speech was short and hawkish by the standards of the Jackson Hole annual meeting, which seems to be a recent coordinated stance by Fed officials to counter speculation that "the Fed will soon be Turn your attention to the idea of ​​a rate cut". Therefore, the market view indicates that the annual meeting in Jackson Hole is a turning point, and the speech of Fed officials from the next week will have a role in adding fuel to the market.

3. As the end of the month is approaching, institutions will usually adjust their positions or exacerbate market volatility

As the end of the month is approaching in the next few days, large institutions and pension funds may adjust their positions during this window period, which will undoubtedly further exacerbate Market volatility. In addition, U.S. stocks this week will enter a historically underperforming month in September, as fund managers tend to sell underperforming positions as the end of the third quarter approaches, which also makes more and more industry insiders. The outlook for global markets is worrying. Related reading: The good show is yet to come! When the "September Curse" meets the Fed's interest rate meeting, will US stocks break history or repeat the same mistakes? In addition, if you want to know the latest financial events at home and abroad, you can check economic indicators, data expectations, forecasts of major financial events, etc. in the information column-calendar tab; you can also pay attention to the one-week preview produced by Futu Information to gain timely insight into financial affairs. Major event, layout investment opportunities. Bullies, how many basis points do you bet the Fed will raise interest rates in September? Will U.S. stocks end the week higher or lower? Let's talk about your views together. I wish you a smooth new week of investment~Editor/somer Risk Warning: The opinions of the authors or guests shown above have their own specific positions, and investment decisions need to be based on independent thinking. Futu will endeavour but cannot guarantee the accuracy and reliability of the above content, and will not be liable for any loss or damage arising from any inaccuracies or omissions.

(Responsible editor:Aerospace stock)

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