Macroeconomics and news:
This week is the week for the release of non-agricultural data. We talked about this topic last week. Powell's remarks last week that he would not consider cutting interest rates for the time being have been supported by GDP and inflation data. If this week's employment data continues to provide effective data support, then the Fed really has reason to reduce its holdings and cut interest rates later this year and reduce the rate cut this year.
Many people may be curious about why the Fed made dovish remarks earlier this year, but now it has become relatively hawkish. The core is one thing - inducement.
The previous dovish remarks have brought good market expectations for the Fed to cut interest rates as soon as possible and to a large extent this year. The world believes that the Fed will cut interest rates as soon as possible, which has led to countries preparing to cut interest rates. Switzerland was too active and directly announced a rate cut. The Swiss rate cut directly led to the strong global expectation that developed countries would cut interest rates, resulting in a large number of currencies being exchanged for the US dollar becoming weaker, and the US dollar continued to maintain its strong ability to attract money from the world.
Then, using economic, inflation, and employment data, it once again emphasized the consolidation of the expectation of not cutting interest rates for the time being and strengthening the strong position of the US dollar. I was saying before that the US manufacturing industry is a weak one. Now, with the purchasing data on Monday, the manufacturing industry may also recover.
The Fed's emphasis on not cutting interest rates for the time being is that the strategic goals have not been achieved and the preparations have not been done well, so it manipulates the data and adjusts the global market expectations for the United States at a macro level. Before the unnecessary crisis breaks out, the Fed does have a reason not to cut interest rates.
However, whether to cut interest rates depends on whether American companies and the banking industry can withstand it. Under the current high interest rates, many companies use layoffs to maintain their own profit ratios. If high interest rates continue to be maintained, the debt crisis of companies and banks will gradually emerge.
If the debt crisis, which has grown to 34.5 trillion, has not yet erupted, the collapse of small-scale companies and banks may trigger a financial crisis, thereby leading to the outbreak of a crisis in the market. This is possible.
Once the Fed starts to cut interest rates, the internal and external pressures it will have to bear will be very huge. The Fed's delay in cutting interest rates is estimated to be a question of Biden's current leadership, and the next Trump, who is currently the most likely to win, may help the Fed achieve a landing of the US economy.This may be an important factor in what the Fed wants.
However, the United States has not cut interest rates for a long time, which actually means there are not many crises at all. The current debt problems in the United States, whether it is corporate, bank, or its own government debt, many potential risks have attracted widespread attention from investors. One issue that everyone may have overlooked is the recent strong rise of gold, although it is mainly due to the avoidance of gold. The increase in risk sentiment, on the other hand, also means that people have less confidence in holding U.S. dollar assets, leading to large purchases of gold to avoid financial risks. This has caused gold prices to hit record highs frequently.
Let’s make a brief prediction. This week’s large and small non-farm payroll data, especially the large non-farm payroll data, may show that the U.S. labor market is still strong and continue to consolidate the rhetoric of not raising interest rates.
In the crypto market, one of the recent focuses of attention is Binance’s announcement of its board of directors structure and personnel, which means that Binance will announce the location of its headquarters in the near future.
After the new CEO of Binance took office last year, he announced that he would establish a relatively traditional corporate structure, including the board of directors, and also announced the company's headquarters. Now that the list of the board of directors has come out, the headquarters feels that it will be announced at the Dubai conference this month. There is a high probability that it will be announced. It's Dubai.
On the one hand, congratulations to Binance for changing from decentralized thinking to centralized and truly down-to-earth management methods, which may be more conducive to the development and rule delineation of the current stage of the encryption market.
