Financial Breakfast on September 13: The Fed enters a period of silence, focusing on the US CPI report

This week (the week of September 13-19), many countries will announce heavy economic data, including the US August CPI, retail sales, initial request, EIA, consumer confidence, etc. The Fed will usher in a period of silence and will not publish Any speech. Previously, many analysts believed that the Fed would announce a big move on the interest rate decision in September this year.



Recently, many officials, including Fed Chairman Powell, have delivered speeches. Many officials seem to have acquiesced that the current interest rate will be maintained for a period of time, but they are divided on whether to give additional forward-looking guidance, and many officials have explicitly ruled out The possibility of negative interest rates.

Fed officials generally believe that the US economy is still facing downside risks in the short term, but some officials are more optimistic about the speed of economic recovery. Among them, Cleveland Federal Reserve Chairman Meister believes that the economy will achieve positive growth in the fourth quarter of this year.

In addition, Fed officials have agreed that further fiscal stimulus is necessary, but officials have disagreeed on the tools to control the yield curve.

Monday (September 13) economic data and economic events are relatively light. Focus on the monthly crude oil market report released by the Organization of the Petroleum Exporting Countries (OPEC), which is generally released around 18-21 GMT+8.

Market hotspots this week

① On Monday, OPEC released its monthly crude oil market report.
② On Tuesday (September 14), the unemployment rate in the United Kingdom, the CPI in the United States, and the IEA release monthly crude oil market reports, and the National Energy Administration releases electricity consumption data for the entire society around the 15th of each month.
③ On Wednesday (September 15) API crude oil inventory report, China's industrial added value, UK CPI, EIA, National Bureau of Statistics released monthly report on residential sales prices in 70 large and medium-sized cities, European Commission President Von der Lein released the annual national conditions to the European Parliament Message.
④ Thursday (September 16) New Zealand's GDP, US retail sales, and the US initially filed for unemployment benefits last week.
⑤ Friday (September 17) Eurozone CPI final value and US consumer confidence.

Holiday reminder this week

On Friday, due to the Mid-Autumn Festival holiday, the Shanghai Futures Exchange, Zhengzhou Commercial Exchange, Dalian Commodity Exchange, and Shanghai Financial Exchange will not conduct night trading. In addition, due to the holiday from September 19 to 21, Shanghai and Shenzhen Stock Exchange, Shanghai Futures Exchange, Dalian Commodity Exchange, Zhengzhou Commercial Exchange, Shanghai Financial Exchange, CICC and Hong Kong Stock Exchange will work on Saturday (September 18). .

Market opening on Monday

Last week review

[Britain's recovery is expected to withstand the test of the surge in new crown cases in the fall] Economists and epidemiologists are increasingly convinced that as the semester begins, employees return to the office, and socialize indoors, the UK's economic recovery will be able to withstand The rise of coronavirus cases in the fall. As the new crown vaccine has proven to be effective in limiting serious diseases, expert opinions indicate that although the new wave of epidemics may slow the UK’s GDP growth, it is unlikely to reverse this situation as it did last winter. The economies of most developed countries have greatly improved their ability to adapt to the new coronavirus, and public health experts believe that although the number of cases may rise sharply, it is unlikely that strict lockdown measures will be necessary.

[European Central Bank: Keep the purchase scale of the Emergency Anti-epidemic Bond Purchase Program (PEPP) unchanged at 1.85 trillion euros] The rate of debt purchases for the Asset Purchase Program (APP) will remain unchanged at 20 billion euros per month. At least until the end of 2023, it will continue to reinvest the principal of maturing securities under the Emergency Anti-epidemic Bond Purchase Program (PEPP). Interest rates will remain at the current level or lower until the inflation rate reaches the target level of 2%. The purchase speed of the PEPP will be moderately reduced. PEPP's debt purchase speed will be lower than in the past few quarters. The PEPP plan will be used flexibly according to market conditions.

[European Central Bank President Lagarde: The rebound phase of economic recovery is advancing day by day. The economy is expected to return to its pre-crisis level by the end of the year. Most of the economy has opened up. The spread of the delta strain on a global scale has delayed the full opening of the economy. Inflation expectations are slightly raised. The financing environment is still good. A favorable financing environment is essential to economic recovery. Ready to adjust all tools as needed at any time. The economy is expected to grow strongly in the third quarter. The economic recovery is based on the success of COVID-19 vaccination. Our manufacturing recovery is hampered by supply shortage constraints. The labor market is improving. The recovery in demand has boosted the confidence of enterprises]

[European Central Bank raises GDP growth forecast for 2021] The European Central Bank expects GDP growth to be 5% in 2021, compared to 4.6% previously; GDP growth is expected to be 4.6% in 2022, and 4.7% previously; GDP growth is expected to be 2023 The speed is 2.1%, which was previously expected to be 2.1%.

[The European Central Bank raises its CPI growth forecast for 2021, 2022, and 2023] The European Central Bank expects CPI growth to be 2.2% in 2021, compared to 1.9% previously; CPI growth is expected to be 1.7% in 2022, compared to 1.5% previously. ; The CPI growth rate is expected to be 1.5% in 2023, compared with 1.4% previously.

[EIA report: U.S. commercial crude oil inventories excluding strategic reserves last week decreased by 1.528 million barrels to 423.9 million barrels] As of the week of September 3, gasoline inventories decreased by 7,215 million barrels, and refined oil inventories decreased by 3,141,100 barrels; the United States last week Domestic crude oil production decreased by 1.5 million barrels to 10 million barrels per day; commercial crude oil imported from strategic reserves last week was 5.81 million barrels per day, a decrease of 530,000 barrels per day from the previous week; exports decreased by 698,000 barrels per day to 2.342 million barrels /day.

[Bank of Canada Governor Macklem: The central bank will raise interest rates first, and then reduce the size of bond holdings. The central bank believes that reinvestment requires monthly purchases of 4 to 5 billion Canadian dollars in bonds. The recovery of the Canadian economy is uneven and there are still many uncertainties. The economic situation still requires the implementation of unconventional support measures. Recovery and inflation will guide the duration of the central bank's reinvestment, and reinvestment purchases will continue for "a period of time"]

[Fed’s Beige Book Report: The growth rate of overall economic activity slowed slightly to a moderate expansion. The fields of manufacturing, transportation, non-financial services, and real estate have become stronger, and the dinning, travel, and tourism industries in most regions have slowed down, indicating that the new crown pneumonia delta mutant strain epidemic is worrying. All regions continue to report an increase in the employment population, but the rate of employment growth is characterized by a category of "slightly to strong". A large number of regions report wage increases. Inflation has stabilized at a high level, with strong growth in half of the regions]

[The Bank of Canada's resolution stated: Maintain the weekly bond purchases at 2 billion Canadian dollars. Maintain forward guidance on interest rates unchanged. In the future, the economic recovery (progress) will be used to adjust QE. Reiterate that the rise in inflation is temporary. The central bank still expects the economy to be strengthened in the second half of the year]

[British Prime Minister Johnson Announces Tax Increases] The British Prime Minister Johnson announced tax increases for workers, companies and shareholders to help restore the British National Health Service (NHS) and reform the "broken" social security system. The British National Insurance (payroll tax) will increase by 1.25% from next year. Johnson said the dividend tax will also increase by 1.25%.

List of major global markets

The U.S. stock market posted its biggest weekly decline since mid-June, and the market was volatile. After more strategists made cautious comments on the market outlook, investors evaluated the latest economic data. The stock market was dragged down by mixed economic data and the Fed’s unclear timetable for downsizing. Apple led the decline in the Dow Jones Industrial Average Price Index after the court ordered the company to reform the way its lucrative App Store operates.

The US producer price index rose more than expected in August, reigniting the debate about when the Fed will withdraw its stimulus measures. Market volatility is violent, because the continuous spread of the epidemic has disrupted economic recovery and pushed up inflation caused by tight supply, but central banks still reiterated their stance on loose monetary policy.

Precious metals and crude oil

Spot gold price closed at its lowest level in the past three weeks, at US$1,787.58 per ounce; it fell by about 2.2% this week, the first weekly decline in five weeks. Data released last Friday showed that the US final demand PPI rose by 0.7% from the previous month. A year-on-year increase of 8.3%, the largest increase on record, and rising U.S. bond yields reduced the attractiveness of interest-free gold.

Rising cost pressures have led the market to expect the central bank to cut stimulus measures soon, and it was these measures that pushed the price of gold to record highs last year. At the same time, the rebound of the new crown epidemic has triggered concerns about economic recovery, boosted the safe-haven demand for gold, and kept prices within a narrow range.

Citi analyst Aakash Doshi and others wrote in the report that the price of gold continues to be trapped near $1,800. The September Fed meeting may be a catalyst for opening a new trading range before the end of the year and establishing a direction. Gold prices are expected to fall in the fourth quarter.

Oil prices have risen for the third consecutive week. New York crude oil futures set the longest consecutive rise since July. Last Friday they rose by 2.3%. After Hurricane Ida about two weeks ago, offshore oil production exceeded 1 million barrels per day. Still not restored. At the same time, the Louisiana refinery is resuming operations, thereby increasing demand for crude oil.

Andrew Lebow, senior partner of Commodity Research Group, said that now the market is focusing on the supply situation in the United States, and people are more deeply aware of the production loss caused by the shutdown in the Gulf of Mexico.

Crude oil prices in the New York market have been fluctuating within a range of $4 since the end of August. The market has been driven by various factors, including the closure of most of the Gulf of Mexico production due to the hurricane, and the decline in US inventories, which boosted oil prices, while the continued epidemic has suppressed the rise in oil prices.

Foreign exchange

The U.S. dollar followed U.S. Treasury yields higher on Friday. Data showed that the producer price (PPI) of the United States rose strongly in August, indicating that high inflation may continue for a period of time. Due to the continuing COVID-19 pandemic, the supply chain is still tight; investors are concerned about the possibility of the Fed When to start reducing asset purchases.

The U.S. dollar index rose 0.12% to 92.62. The U.S. dollar has rebounded from a one-month low previously touched. The August employment data released on the same day showed that employment growth has slowed, and wages rose higher than expected. However, the U.S. dollar has not yet established a strong trend, and investors are waiting for new clues to determine when the Fed may begin to reduce its bond purchase plan and eventually raise interest rates.

Erik Nelson, a macro strategist at Wells Fargo Bank in New York, said that the most important thing for me is when the Fed will raise interest rates. Unfortunately, we will not know the answer for some time.

Cleveland Federal Reserve Chairman Meester said on Friday that she still hopes that the Fed will begin to reduce the scale of asset purchases this year. Some policymakers have previously made it clear that weak employment growth in August will not shake their support for starting to cut stimulus.

The euro fell 0.09% against the dollar to 1.1814, after the European Central Bank said the day before that it would reduce the size of emergency government bond purchases in the coming quarter.

After the release of Canadian employment data, the Canadian dollar once hit an intraday high; the country’s employment population increased by 90,200, better than market expectations of 68,200; the U.S. dollar rose 0.21% to 1.2691 against the Canadian dollar, which fell 0.6% during the intraday session. Marc Chandler, chief market strategist at Bannockburn Global, said that if the U.S. dollar closes below 1.26 Canadian dollars today, it will test 1.2500-1.2525 Canadian dollars early next week.

The Swiss franc and the yen fell against the U.S. dollar last Friday; the U.S. dollar rose 0.19% to 109.93 against the yen. The British pound ignored the data that the British economy stopped in July. The focus of the market was on the hawkish tendencies of the Bank of England; the pound was basically flat against the dollar at 1.3839.

The Australian dollar fell 0.16 to 0.7356 against the US dollar, and the New Zealand dollar rose 0.11% to 0.7113 against the US dollar. It was up 0.7% earlier.

International Financial Information

U.S. Gulf area crude oil production continues to recover Recovered 34%. Royal Dutch Shell stated that it has re-sent its employees back to the Mars platform and continues to re-enter Auger and other platforms. Pipeline operator NuStar Energy said its crude oil terminal in St. James, Louisiana has resumed full service.

Guzman, the founder of the Peruvian anti-government guerrilla organization "Glorious Path", passed away. On the 11th local time, Silva, head of the Peruvian National Prison Administration, confirmed to the local media that the 86-year-old anti-government guerrilla organization "Glorious Path" "The founder Guzman died in prison at 6:40 in the morning. "Luminous Path" is Peru's main anti-government guerrilla organization, founded in 1970 by Avimael Guzman. According to local media reports, the organization has planned multiple attacks across Peru, killing at least 30,000 people. Guzman was arrested in 1992 and sentenced to life imprisonment. Subsequently, the power of this organization was greatly weakened. (CCTV)

The Fed’s accountability system has come under fire. The stock trading of the two previous Federal Reserve Bank presidents was exposed.
The latest disclosure documents of two senior Federal Reserve officials showed that they had investments and transactions. 12 regional reserve banks underwent major reforms. The Fed Presidents Eric Rosengren and Robert Kaplan of Boston and Dallas said on Thursday that they will sell their personal shares before September 30, a move aimed at quelling ethical doubts about their trading activities last year.

Both said that their transactions are in line with the Federal Reserve's ethics and that they are taking action to avoid even seemingly any conflicts of interest. But critics say that this situation shouldn't have happened from the start, and that fundamental changes are needed to improve oversight and accountability.

Senator Elizabeth Warren, Democrat of Massachusetts, said that Fed officials should not "get rich for themselves through transactions. I said before and will say later: Members of Congress and senior government officials should not be allowed to trade or hold stocks. That's it." "The trading activities of the two were made public in the annual disclosure documents submitted by the 12 regional Fed presidents. This comes at a time when the Federal Reserve has already been criticized for its monetary policy pushing up asset prices, which disproportionately benefited wealthy Americans. .

JPMorgan Chase: Delta strain expected to delay the recovery of the U.S. aviation industry
The fast-spreading delta strain of the new crown virus is causing a delay in the recovery of the U.S. aviation industry, but it is not expected to reverse the recovery trend because the industry’s liquidity situation has stabilized. On Thursday, many American airlines warned that due to the delta strain, ticket sales would slow down and lower their revenue expectations. However, due to the three rounds of rescue measures by the US government and the widely open capital market, the liquidity of airlines is no longer a problem. U.S. domestic demand has stabilized at around 60% in 2019 without deterioration.

Former Treasury Secretary Summers is worried that the United States will repeat the same mistakes because the economic and foreign policies are similar to those of the era of high inflation. There are worrying similarities between foreign policies, although inflationary pressures are not as extreme as they were back then. Summers said in an interview, "I don't think we are close to the double-digit inflation of the Carter era, but I do think that the danger of the United States repeating almost all the mistakes of the 1960s and early 1970s is extremely serious."

Former Treasury Secretary Summers stated that there are worrying similarities between the current US economy and foreign policy and the 1960s and 1970s. He made the following similarities: Withdrawal from Afghanistan in 2021 and Vietnam in the 1970s; both the White House and the White House have tried to implement progressive social and economic policies; social protests have increased; the Fed is increasingly talking about social goals

Summers said that he saw more and more economists start to say, "Well, if the inflation target rises from 2% to 3%, it should be fine. We can't risk doing anything that might harm the economy." He pointed out, “I personally think that this situation will make us face some very significant difficulties in the future.” Next week’s Consumer Price Index (CPI) report is expected to show that the CPI in August rose 0.4% from the previous month, compared with 2020. It rose 5.3% in August 2008. Harvard University professor Ken Rogoff recently wrote for the Project Syndicate website that “there are many similarities between the 1970s and today, which is disturbing.”

Domestic financial information

"Sandu" will be close to the northeastern coast of Zhejiang, Zhejiang, Shanghai, Fujian, severe sea conditions, wave warning upgraded to red The National Ocean Forecasting Station upgraded the wave warning to red this morning (12th), and continues to issue blue storm surge warnings. In terms of waves, affected by the "Santo" (super typhoon level), it is expected that from noon on September 12th to noon on the 13th, a 7 to 12-meter violent wave will appear in the East China Sea and the eastern ocean to the violent wave area. The warning level is orange; the coastal waters of Zhejiang will appear 4 to 6 meters of large waves to violent waves, and the coastal waters will appear red; the coastal waters of Shanghai will appear 3 to 4 meters of large waves to large waves. The wave warning level in coastal waters is yellow; in the coastal waters of northern Fujian, there will be medium to large waves of 2 to 3.4 meters, and the wave warning level in the coastal waters is blue. (CCTV)

Orange warning! Level 17 gale! The "super typhoon" struck
The Central Meteorological Observatory continued to issue a typhoon orange warning at 06:00 on September 12. Gale forecast: From 8 o'clock on the 12th to 8 o'clock on the 13th, most of the East China Sea and the waters near the Diaoyu Islands, the Taiwan Strait, the Bashi Strait, the east of Taiwan, the coast of Zhejiang, the coast of central and northern Fujian, the coast of Shanghai, are affected by the "Sandu" There will be 6-7 strong winds along the coast of central and southern Jiangsu and Taiwan Island. Among them, the Bashi Strait, the east of Taiwan Island, the western waters of the East China Sea, the eastern coast of Zhejiang, and the eastern coast of Taiwan will have winds of 8-11. Level 12-14, gusts 15-16, the typhoon center has 15-16 winds, gusts 17 or above; affected by "Conson", the western and southern South China Sea, the Nansha Islands will have 6-7 There are strong winds, among which, some sea areas in the western part of the South China Sea have wind force 8 and gust 9 winds. Precipitation forecast: From 08:00 on the 12th to 08:00 on the 13th, there will be heavy to heavy rains in parts of northern and central eastern Zhejiang, Shanghai, southeastern Jiangsu, northeastern Fujian, Taiwan Island and other places. Among them, there will be heavy heavy rains in eastern Zhejiang ( 100-160 mm), there is a heavy rainstorm or extremely heavy rain (250-280 mm) locally on the island of Taiwan. CCTV Finance)

140 million shares of LeTV were auctioned, with a total starting price of 137 million yuan
At 10 o'clock yesterday, the 140 million shares of LeTV shares held by the brothers Jia Yuemin and Jia Yueting were publicly auctioned online. The equity auctioned this time involves 120 million shares of LeTV held by Jia Yueting and 20 million shares of LeTV held by Jia Yuemin. Due to the large number of shares, Jia Yueting's shares were divided into six auctions, and Jia Yuemin's shares were also divided into two auctions. The total starting price of the eight targets is 137 million yuan. (Beijing Youth Daily)

The second-generation COVID-19 vaccine has completed phase II clinical trials.
For the development of the second-generation COVID-19 vaccine, Zheng Zhongwei, the leader of the vaccine research and development team of the scientific research group and director of the Science and Technology Development Center of the National Health Commission, said that the first is China’s The vaccine research and development unit has carried out research on inactivated vaccines against Gamma and Delta strains. The second is to carry out research on broad-spectrum or multivalent recombinant protein vaccines against different variants. The third is to carry out adenovirus vector vaccines and vaccines against Beta and Delta strains. Research and development of nucleic acid vaccines. Zhu Jingjin, Secretary of the Party Committee of Sinopharm Group, said that vaccines against mutant strains such as Delta and Beta have already been prepared. The second-generation broad-spectrum recombinant protein vaccine has also been developed, and phase I and II clinical trials have been completed.

In the first eight months, China's import and export, export, and import growth rates were the highest in the same period in 10 years.
According to the Ministry of Commerce, from January to August, China's import and export continued the high growth momentum since the fourth quarter of last year. From a year-on-year perspective, imports and exports, exports, and imports increased by 23.7%, 23.2%, and 24.4% respectively, the highest levels in the same period in the past decade. From the two-year average growth rate, imports and exports, exports, and imports increased by 10.8%, 11.2%, and 10.3% respectively, maintaining double-digit growth.

CITIC Securities: When the style switch is in progress, the allocation focus is biased to value.
The latest research report of CITIC Securities believes that the macroeconomic and policy environment continues to improve, and the market liquidity is gradually improving under the period of macro liquidity. It is recommended to continue to actively participate in this round of styles While switching to maintain a balanced configuration, the focus of configuration continues to shift toward value. Combining the prosperity and valuation, look for the positive expectations of the segmented track, starting from three directions: the left-side layout of the high-prosperous consumer and pharmaceutical segments in the value sector; continue to focus on the manufacturing and technology sectors in the third quarterly report is expected to exceed expectations Machinery, military industry, semiconductors, and lithium batteries; pay attention to the valuation restoration opportunities of the A-share financial sector and the Internet leaders of Hong Kong stocks.

CITIC Securities: When the style switch is in progress, the allocation focus is biased to value.
The latest research report of CITIC Securities believes that the macroeconomic and policy environment continues to improve, and the market liquidity is gradually improving under the period of macro liquidity. It is recommended to continue to actively participate in this round of styles While switching to maintain a balanced configuration, the focus of configuration continues to shift toward value. Combining the prosperity and valuation, look for the positive expectations of the segmented track, starting from three directions: the left-side layout of the high-prosperous consumer and pharmaceutical segments in the value sector; continue to focus on the manufacturing and technology sectors in the third quarterly report is expected to exceed expectations Machinery, military industry, semiconductors, and lithium batteries; pay attention to the valuation restoration opportunities of the A-share financial sector and the Internet leaders of Hong Kong stocks.