This week’s key international financial events include: US Federal Reserve (Fed) Chairman Jerome Powell’s speech, following last week’s super central bank week in major economies, Australia, Sweden and other central banks took over to announce interest rate decisions, US President Joe Biden will Deliver the State of the Union address. In addition, China will release January consumer price index (CPI) and producer price index (PPI), while the UK’s fourth quarter and December gross domestic product (GDP) data will also be released.
This week’s trading notes (0206-0210)
1. Fed Chairman Jerome Powell made a speech
Fed Chairman Jerome Powell will give a speech at 1 am Taiwan time on Wednesday (8th). The latest U.S. non-agricultural report for January shows that the number of new jobs has far exceeded expectations, indicating that the job market has not cooled down. Means the Fed still has room to continue tightening monetary policy.
Wall Street Journal reporter Nick Timiraos, known as the “Fed megaphone”, once said that the hot labor market may drive wages to rise faster, becoming another “lead” to ignite inflation. Ellen Zentner, chief economist at Morgan Stanley, once said that from now on, the job market may become the key indicator rather than the consumer price index (CPI). 2% only way.
Powell said at a press conference a few days ago that “the disinflationary process has begun,” suggesting that an aggressive tightening cycle is beginning to moderate the pace of price growth, although he warned of several more rate hikes ahead.
Analysts believe that although Powell emphasized at the press conference after the currency policy that interest rates will continue to rise, the change in the wording of inflation in the statement of the Federal Open Market Committee (FOMC), as well as the change from “degree of interest rate increase” to “increase in interest rates” Changes in the wording of “pace of interest rates” all indicate that officials are debating when to pause interest rate hikes, which is itself a dovish signal.
Roger Hallam, director of rates at Vanguard, said: “While Powell indicated at least a few more rate hikes, the bond market is extrapolating from Powell’s more balanced tone that rate hikes will soon be paused. Stronger data will lead to the prospect of more action.”
This week, many Fed officials will speak one after another, the most noteworthy of which is that John Williams, President of the Federal Reserve Bank of New York, will be interviewed by the Wall Street Journal (WSJ). At the same time, Fed Governor Waller (Christopher Waller) will also speak. Both are permanent voting officials of the Federal Open Market Committee (FOMC). Neel Kashkari will speak.
2. Multi-national central bank decision-making takes over
The U.S. Federal Reserve (Fed), the European Central Bank (ECB), and the Bank of England (BOE) successively announced the latest monetary policy decisions last week. The three central banks raised their respective base interest rates. Rod announces the latest monetary policy decision.
Some market analysts believe that last year, with the central banks of many countries raising interest rates to deal with inflation, the global inflation situation has now improved, and the central bank’s tightening pace is coming to an end. The Fed has raised interest rates from the previous 2 yards (50 bps) to 1 yard (25 bps).
3. Biden’s State of the Union address
U.S. President Joe Biden will deliver his State of the Union address on Tuesday. The U.S. Constitution stipulates that the president must report to a joint session of Congress once a year, known as the State of the Union address; generally speaking, this will be held in January or February of each year, allowing the president to talk about the achievements of the past year and look forward to the priority plan for the next year’s governance.
Reuters has reported that Biden is still considering candidates for the chairman of the National Economic Council and the Council of Economic Advisers, and the decision is expected to be made after next week’s State of the Union address. The Biden team has considered Fed Vice Chairman Lael Brainard to head the National Economic Council and Biden confidant Jared Bernstein to head the Council of Economic Advisers.
Other top candidates for NEC chair include U.S. Treasury Undersecretary Wally Adeyemo and Commerce Secretary Gina Raimondo. A White House deputy spokesman said that no candidate for the position had been identified and any related reports were incorrect.
In addition, according to other foreign media reports, after US Secretary of State Blinken met with Chinese Foreign Minister Qin Gang, President Biden will discuss the “challenges” posed by China and Russia in his State of the Union speech. The “South China Morning Post” pointed out that comments about China and Russia will be the focus of Biden’s State of the Union address next week. Earlier, the Russian foreign ministry said Chinese President Xi Jinping intended to visit Moscow.