Macroeconomic view of the world:
Dollar and US Treasury
Last night's "parallel" highs in the US dollar index and US Treasury yields made many people start to worry about market risks. In fact, through this point we can clearly see that the strength of the US dollar index is a bit "false".
Theoretically, the rise of the US dollar index, under the premise of high expectations for the future US economy, investors seeking safe assets will push up the price of US Treasury bonds, accompanied by a decline in US Treasury yields.
However, yesterday, the price of the US dollar index rose, accompanied by the decline in US Treasury prices, and the US Treasury yields rose all the way. In fact, from another perspective, it once again proved my previous point of view that the strength of the US dollar index is only superficial. The actual US dollar's confidence index in the world has declined, and the rising US dollar index has not driven the price of US Treasury bonds to rise. On the contrary, the sales of long-term US Treasury bonds have declined, and the yields have increased.
Yesterday, the sales of 7-year US Treasury bonds basically did not meet expectations, and the sales of long-term US Treasury bonds were weak. Debt is the total assessment and expectation of investors for a country's future. The deterioration of long-term bond sales also indicates that the expected value of US dollar capital among global investors is slowly decreasing.
The 10-year US Treasury bond continued to rise yesterday.
Economic data and employment/stock market
Today, the US first quarter GDP data was revised. The result of the previous first quarter GDP was the strength of the US economy. Today's GDP data was revised from the previous value of 1.6 to 1.3. The value was relatively mild compared with the previous value, which was in line with expectations, indicating that the economy remained operational and did not enter a recession. At the same time, the economy would not overheat. This should be a foreshadowing for tomorrow's PCE data. Otherwise, under the strong GDP value in the first quarter, if the PCE in April was too mild, it would be a bit "fake".
Today, the number of initial jobless claims for the week of May 25 was 219,000, higher than the expected 218,000 and higher than the previous value of 215,000. The increase in the number of initial jobless claims proves that the current employment situation in the United States has slowed down, but it remains strong. Of course, May is also a normal month for rising unemployment in the United States.
Under the release of two-way data, although it represents the slowdown of the US economy, it brings more optimistic reasons for inflationary pressure, but the slowdown of the economy, coupled with some sales data showing that consumer spending power has deteriorated, has led to a short-term decline in US stocks, especially a general decline in technology stocks. Currently, only Apple and Tesla have maintained a small increase.
For today's data release, it is confirmed to be a double-edged sword. The slowdown in inflation pressure will help the optimistic expectation of a rate cut as soon as possible in the future, but the future profitability of enterprises in the short term is questioned by the market, leading to a short-term decline in the stock market. At present, we still need to pay attention to the release of the PCE index, which is the focus of tomorrow. The market will wait for the PCE index to interpret more information that will help the optimistic expectation of a rate cut this year.
The current US dollar and US bonds
The current US dollar index has fallen below 105 again and is currently maintained at around 104.6. The 10-year US bond yield has fallen year-on-year and is currently maintained at 4.545%. Although the price of 10-year US bonds has fallen, it still maintains a yield of more than 4.5%. The impact on the risk market is still relatively obvious. At the same time, the sales of long-term US bonds are not ideal, which will further consolidate the increase in US bond yields in the future, which is not good for the risk market. If you want to stabilize the trend of US stocks and increase the sales of US bonds, the Federal Reserve needs to talk about the expectation of rate cuts as soon as possible to prove to the world that the United States has the ability and confidence to face all economic problems after the rate cut, and at the same time, it can enhance confidence in the US dollar.
However, it is obvious that we cannot see this result at present, and we can only wait.
Gold and crude oil
International gold still maintains a range of fluctuations around 2300-2350. Although it has not broken through 2350 in the short term, it is obvious that the bullish force in the gold market has helped the gold price to stabilize above 2300. As long as the current crisis in the United States cannot be effectively reduced, the gold price cannot be suppressed and will break through sooner or later.
Since the international crude oil price has been falling since April, although the overall price is still on a downward trend, the "bull market" dividing line of 80 US dollars has never been broken. The crude oil price has always remained at a high data, and according to the current assessment of geopolitical aspects, coupled with the regulation of various countries, the crude oil price cannot be effectively reduced in the short term.
BTC and BTC futures
The CME Bitcoin futures index continues to maintain a negative premium of 50 points with the spot, which can of course be regarded as a parity state. Tomorrow, facing the end of the month, weekends, cyclical options, and monthly options and futures concentrated delivery days, the amount involved is large. At the same time, with the PCE index to be announced tomorrow night, the current bullish sentiment in the futures market is relatively cautious and conservative.
Bitcoin has slightly increased with the data tonight, and now it is falling after digesting the emotions. Tonight and tomorrow night before the PCE index is released, if nothing unexpected happens (there is a small probability of breaking news), the market will basically continue to maintain low liquidity fluctuations to maintain, waiting for the emotional guidance after the data is released.
