Macroeconomics and news: (long article, involving important events this week)
The current macroeconomic focus is on the rebound of the yen exchange rate over the weekend after hitting a historical low. The market began to speculate that the Japanese government intervened in the exchange rate, causing the exchange rate to rise. The Japanese Finance Minister refused to respond. The rise in the yen exchange rate has led the market to expect that the Federal Reserve will use its speech this week to guide market sentiment towards inflationary pressure issues, thereby boosting the US dollar index, which will once again have a suppressive effect on the risk market.
In fact, it is not difficult to understand the rebound in the yen exchange rate. The possibility of government intervention is not great. The depreciation of the exchange rate may lead to a short-term rise in inflation, but it is a bit too early to talk about inflationary pressure in the Japanese economy since the end of deflation. It can be defensive to suppress inflation, but I don’t think it will directly intervene in the currency because of inflation. And the decline in the yen exchange rate has both advantages and disadvantages.
Personally, I think the rebound in the yen is a short-term rebound caused by the short-term oversold yen, which has led to a large number of foreign capital purchasing yen assets, or it is to find an excuse for the United States to further boost the dollar.
In terms of macro data this week, the speech after the Fed’s interest rate decision in the early hours of Thursday morning, the market currently believes that Fed officials will continue to be hawkish due to inflationary pressure, thereby boosting the dollar to maintain a strong position.
The non-farm payrolls data on Wednesday and Friday, especially the large non-farm payrolls data on Friday, will basically show a relatively weakened data according to the current market expectations and previous values. The previous US employment data has been overheated and strong, and the rapid cooling of US GDP last week, combined with inflation pressure, is under control. Now the expectation of a soft landing is only one employment data away. If the employment data shows that the employment market is gradually cooling down, but still maintains positive growth, this basically matches the expectation of a soft landing of the US economy.
US stocks currently opened higher, but under the influence of the yen exchange rate, the performance of US stocks is actually mixed. Only Tesla, Apple and Google are rising in technology stocks. The former is due to the return of the Chinese market share, resulting in a single-day increase of 10%, while the latter Apple and Google will announce quarterly financial reports on Tuesday and Thursday this week, which is considered to be a positive that has not yet been realized, so they are currently maintaining a small increase.In addition, other technology giants are currently maintaining a downward trend.
From this point, we can clearly see that although the financial report has brought positive sentiment, how long can the advantages of the financial report drive the stock price? As the market changes over time, investors have overvalued and expected too much of technology companies. Last week, Meta's stock price fell despite the good financial report due to overly high expectations. The financial report is more like a magic mirror, allowing the company to truly show itself to investors. At present, the US stock market is only driven by sporadic technology stocks and stocks with good profits, but under the tense economic environment, it is good not to close down today.
In the early hours of Monday morning, that is, at 5 pm Eastern Time, after the US stock market closed, MSTR MicroStrategy's financial report will be released, but according to the current stock price trend, it is not optimistic. MicroStrategy's financial report results must be good, after all, the profits brought by holding a large amount of Bitcoin are an important profit structure to maintain the company. However, the current good financial report does not necessarily mean a good future. Whether the market will put forward higher expectations and valuations for MicroStrategy's stock price, this will put MicroStrategy's financial report under greater pressure.
The current rise in US stocks has once again led to a small rebound in Bitcoin, but the key position has not yet been broken through and stabilized. In addition, we must pay attention to the trend of US funds in the crypto market after the US stock market closes. If the US stock market performs well, it will help the crypto market with sentiment, or it will cause a short-term capital sucking.
