Financial Breakfast on September 27: The US non-agricultural report hits, and you need to pay attention to the elections in the two countries

This week (the week of September 27th to October 3rd) will usher in a number of heavy economic data including the September non-agricultural report of the United States. Specifically, including the August durable goods orders from the United States and the Eurozone Heavy economic data such as September prosperity index, China September PMI, Eurozone September CPI data, US August PCE price index, and US September ISM manufacturing PMI. In addition, we need to pay attention to the follow-up impact of the German election, the Japanese election, Fed Chairman Powell and many other Fed officials, European Central Bank President Lagarde and many other officials, the Bank of England Pele and the speeches of the US Treasury Secretary Yellen.



On Monday (September 27), the focus will be on US durable goods orders in August. The current market expects that the monthly rate of US durable goods orders in August is 0.6%. In terms of risk events, on the one hand, it is necessary to pay attention to the speeches of European Central Bank President Lagarde to the Economic and Monetary Affairs Committee of the European Parliament; Perpetual vote committee, New York Fed President Williams' speech, the official will deliver two speeches during the New York session on Monday.

With regard to the German general election, polls show that the greatest possibility is to produce a three-party coalition government, breaking the tradition of a two-party coalition ruling after the reunification of the two Germanys. It also marked the end of Merkel's 16-year term. Investors also need to focus on.

With regard to the Japanese general election, Japanese Prime Minister Yoshihide Suga is about to step down and he said that he would not serve in the new cabinet. According to Japanese media reports, on the morning of the 25th local time, Japanese Prime Minister Yoshihide Suga, who was visiting the United States, said in Washington that he himself would not serve in the new cabinet. , Will not serve in the new cabinet. According to reports, the results of the presidential election of the Liberal Democratic Party of Japan will be announced on Wednesday (September 29), which also means that Yoshihide Suga's term as prime minister is coming to an end. In this regard, Suga Yoshihide said on the same day that after the election results are released, even if the next prime minister intends to invite him to serve in the cabinet, he will not accept it.

It is also worth noting that New Zealand entered summer time last Sunday (September 26), and its financial market trading time and data release time were one hour earlier than winter time. Australia enters summer time at 02:00 on Sunday (October 3), and its financial market trading time and data release time are one hour earlier than winter time.

Market hotspots this week

① On Monday, US August durable goods orders, European Central Bank President Lagarde delivered a speech to the Economic and Monetary Affairs Committee of the European Parliament, 2021 FOMC vote committee, Chicago Fed chairman Evans and FOMC permanent vote committee, New York Fed chairman William Speaking, European Central Bank President Lagarde delivered a speech at the European Central Bank’s Central Bank Financial Forum.
② On Tuesday (September 28) China's August annual profit rate of industrial enterprises above designated size, the Bank of Japan announced meeting minutes, European Central Bank President Lagarde delivered a speech at the European Central Bank’s Central Bank Financial Forum, Fed Chairman Powell and US Treasury Secretary Yellen Attended the hearings held by the Banking, Housing and Urban Affairs Committee of the U.S. Senate.
③ On Wednesday (September 29), the Eurozone September Sentiment Index, Japan held the Liberal Democratic Party’s members of Congress to vote and vote, the Bank of England Governor Bailey, the Bank of Japan Governor Haruhiko Kuroda, the European Central Bank President Lagarde, and the Fed Chairman Powell delivered a speech at the European Central Bank Financial Forum Group.
④ On Thursday (September 30) China’s September PMI, the U.S. House of Representatives expert panel held a hearing on the Federal Reserve and the Treasury Department’s response to the COVID-19 pandemic. Discussion. In 2021, the FOMC voting committee and Atlanta Fed President Bostic delivered a speech on the economy.
⑤ Friday (October 1) Eurozone September CPI data, August PCE price index annual rate in the United States, September ISM manufacturing PMI in the United States, and the Bank of Japan announced a summary of the opinions of the Monetary Policy Committee members on September 21-22, 2021 FOMC vote committee and Chicago Fed President Evans participated in an online event, St. Louis Fed President Brad gave an online speech, and Philadelphia Fed Chairman Hack gave an online speech at an event.

Holiday reminder this week

On Thursday, the Shanghai Futures Exchange, Zhengzhou Commercial Exchange, Dalian Commercial Exchange, and Shanghai Financial Exchange will not conduct night trading due to the National Day holiday. Due to the National Day holiday on Friday, the Shanghai and Shenzhen Stock Exchanges, Shanghai Futures Exchange, Zhengzhou Commercial Exchange, Dalian Commodity Exchange, Shanghai Financial Exchange, and Hong Kong Stock Exchange will not conduct trading. October 1-7 will be closed for a total of 7 days.

Market opening on Monday

Last week review

[Powell led senior Federal Reserve officials to listen to public opinion and found that the impact of the epidemic on the economy is more pessimistic than the data] As the Fed is considering reducing its emergency stimulus measures, Powell listened to a series of situations on Friday that the US economy is still plagued by the new crown epidemic. He said at an event called "The Federal Reserve Listening", "I have never seen a supply chain problem like this, and I have never seen an economy experiencing a labor shortage at the same time, a large number of people are unemployed, and a lot of labor is idle." . Although there was no discussion of economic prospects or monetary policy during the event, Powell heard many ideas. Compared with the optimistic message conveyed by economic data, the participants described a different picture. They said that the epidemic has caused a series of shocking shocks to the supply chain, inflation, and labor market.

[U.S. natural gas futures prices have risen and concerns about tight inventories persist] Due to the rebound of LNG exports, production is still sluggish, and people are worried about low natural gas inventories before the winter, and U.S. natural gas prices have risen. Gary Cunningham, head of market research at Tradition Energy, said, “Although the weather has been relatively mild in the past few weeks and the LNG facilities have been offline, the injection of reserves is still very small. Some offshore rigs may be shut down for several months, thereby inhibiting supply in the winter. The news also supported natural gas prices." After Hurricane Ida, about 24% of the gas production capacity in the Gulf of Mexico is still closed, and production is not expected to fully recover until next year.

[The Bank of England maintains the scale of bond purchases and interest rates unchanged] The Bank of England expects GDP growth in the third quarter to be 2.5% lower than the level before the epidemic. The GDP growth rate in the third quarter is expected to be 2.1%, which was previously expected to be 2.9%. The downward revision of the GDP growth rate in the third quarter reflects the impact of supply constraints. Inflation is partly driven by the base effect. Any initial tightening measures should be implemented through bank interest rates. The current energy development poses an upside risk to the data forecast in April. It is estimated that by the second quarter of 2022, the UK inflation rate may remain above 4%.

[U.S. Republicans refuse to cooperate with Democrats and Pelosi promises to avoid government shutdown] In view of the Republicans’ opposition to linking the debt ceiling to the expedient spending bill, Speaker of the House of Representatives Pelosi hinted that the Democrats will pass the expedient spending bill without raising the debt ceiling. Avoid government shutdown. Pelosi said at a press conference on Thursday that regardless of the outcome, we will pass the "Continuing Resolution Act" (CR) in both houses before September 30 to provide funding for the federal government in the new fiscal year beginning on October 31. support. The House of Representatives passed an expedient spending measure this week that will guarantee the operation of the federal government until December 3 and suspend the debt ceiling until December 16, 2022. However, the Senate is expected to block the bill from passing.

[Powell: If economic progress continues, it may soon be guaranteed that the Fed will begin to reduce QE. The gradual reduction of QE will end/complete around the middle of 2022. The code reduction QE does not directly signal an interest rate hike. FOMC members have extensive support for the time point and speed of code reduction QE. The Fed will still implement asset purchases, but it is time to reduce QE. Substantial progress has been made on inflation. Inflation expectations reflect the "very moderate" degree of inflation overshoot (rising through the target). A large number of FOMC members said that the job market is trying to make substantial progress. By the next FOMC monetary policy meeting, it may meet the employment and price test]

[Federal Reserve Resolution Statement: Maintain the target range of the federal funds rate unchanged at 0%-0.25%, and maintain the discount rate unchanged at 0.25%. Interest rate expectations (dot plot) show that FOMC members have a wide range of views on whether to raise interest rates in 2022-the first time since the 1980s. The economic and employment situation has continued to strengthen. High inflation reflects the influence of temporary factors to a large extent. The New York Fed raises the limit of ON RRP counterparties to US$160 billion]

[Fed's September dot matrix chart: Nine members expect the Fed to start raising interest rates in 2022, and 7 in June; 6 members are expected to raise interest rates once in 2022, and 3 members are expected to raise interest rates twice in 2022. Except for one committee member, all other committee members are expected to start raising interest rates in 2023, with 13 members in June]

[The United States will relax restrictions on the entry of passengers on international flights]
The White House said on the 20th that the US government plans to relax entry restrictions on foreign travelers who are "fully vaccinated against the new crown" from early November. The White House Coordinator of Covid-19 Response, Jeffrey Zintz, said that the new regulations apply to all international flights arriving in the United States, and all foreign passengers must present a “fully vaccinated against COVID-19” certificate when entering the United States, and a certificate of negative COVID-19 test within 72 hours before departure. . International travelers who have been fully vaccinated do not need to be quarantined after entering the United States. The regulations will come into effect in early November so that relevant agencies and airlines can prepare. (Xinhua News Agency)

List of major global markets

Although the global stock market had turbulence earlier this week, US stocks ended with a rally on Friday. Traders ignored the Fed’s reduction of stimulus measures, and the S&P 500 rebounded in late trading, expanding weekly gains, with energy and financial stocks leading the way. The two regional Fed presidents stated that the U.S. economy has already met the Fed’s conditions for quickly starting to reduce asset purchases.

The Bank of America Research report quoted EPFR Global data as saying that as of the week of September 22, $28.6 billion flowed out of U.S. equity funds, the largest since February 2018. Even with a large outflow of funds, the private clients of Bank of America still have heavy stocks, and approximately 65% of the assets under management are invested in stocks.

Precious metals and crude oil

Spot gold's gains narrowed last Friday and closed near the $1750 mark. Traders digested the Fed's policy guidance and the benchmark 10-year US Treasury yield rose to an intraday high, weakening the demand for gold.

After the results of the Fed's hard-line meeting, traders moved their expectations for the Fed to raise interest rates to the end of 2022.

Naeem Aslam, chief market analyst at Ava Trade, said that investors are evaluating the Federal Reserve’s remarks that the unprecedented stimulus measures provided to the market during the coronavirus pandemic are about to be phased out. However, because there is no timetable, scale and speed of downscaling. Specific details prevented gold from falling further. Looking ahead, investors should understand that unless the US dollar index changes significantly, the price of gold may be affected to a greater extent by investors' risk appetite.

U.S. crude oil rose by 2.8% last week, rising for the fifth consecutive week. According to data from data analysis company Kayrros, global onshore crude oil inventories fell by nearly 21 million barrels last week, led by China, while U.S. inventories were close to a three-year low. The surge in natural gas prices is expected to force some consumers to switch to oil, thereby further tightening the market before the arrival of winter in the northern hemisphere.

Rystad Energy's crude oil market analyst Louise Dickson said in a report that the market reflects the long-term impact of supply disruptions and the inventory that may be consumed to meet refinery needs. In terms of oil demand, there is no new blockade in Europe and China's road traffic is strong. The recovery, as well as the removal of restrictions on the entry of foreign tourists from the United States in November, all of these have raised the prospects for demand growth in the coming quarters.

Foreign exchange

The U.S. dollar closed stronger last week because market concerns about inflation and Fed officials’ comments fueled expectations about the Fed’s underweight asset acquisitions; at the same time, uncertainty about the US debt ceiling also suppressed risk appetite. The US dollar was generally higher against other currencies on Friday, and the Australian dollar lags behind other currencies.

The dollar index rose 0.18% to 93.27, up by about 0.05% last week; the US 10-year Treasury bond yield rose 2.8 basis points to 1.46%, and last Thursday jumped 13 basis points, because investors' expectations for the Fed to raise interest rates increased.

Fed Chairman Powell said in a video conference last Friday that I have never seen such a supply chain problem, never seen such an economy: severe labor shortage, a large number of unemployed people, and a lot of idle labor in the labor market.

Kansas City Fed President Esther George said in his speech that, in my opinion, the standard for further substantive progress has been met, inflation is much higher than our target, and the unemployment rate is 5.2%, which is 1.5 percentage points lower than in December.

The euro to US dollar fell 0.16% to 1.1720, having failed to break through the key resistance near the 1.1750 US dollar; speculation and option buying slowed the decline in the exchange rate to 1.1701 lows; the euro fell 0.04% against the US dollar in a week.

The U.S. dollar rose 0.35% to 110.72 against the yen and hit 110.79 during the intraday session, the highest level since August 11; cumulatively throughout the week, the yen performed the weakest among G-10 currencies, and the dollar rose 0.72% against the yen; European traders said that hedging selling is expected near 111.00 yen, but if hedging costs rise, it may be at risk; the top of the nine-year-old flag pattern is near 111.12; speculative buying interest is at 109.80-00. . The euro against the yen broke through the 200-day moving average at 129.66.

The pound fell 0.30% to 1.3679 against the US dollar, and traders turned their attention to the speech of the Governor of the Bank of England Andrew Bailey next week; there was a double bottom support above 1.3600 US dollars; the exchange rate fell by 0.45% on a weekly basis.

The U.S. dollar fell slightly to 1.2652 against the Canadian dollar. Due to the 0.9% increase in oil prices, the exchange rate fell from the highest increase of 0.60%; the currency pair fell by 0.88% this week.

International Financial Information

[BP closed some gas stations in the UK]
BP announced on the 23rd that due to the shortage of truck drivers across the country, it is difficult to transport refined gasoline at refineries. The company had to temporarily close some gas stations in the UK. On the same day, people drove in line to wait for refueling outside many gas stations in London. According to Reuters, BP has about 1,200 private-brand gas stations across the UK. After announcing the closure of some gas stations on the 23rd, the company will give priority to expressway service areas, arterial roads and high-demand stations. Esso Petroleum Co., Ltd., a subsidiary of Exxon Mobil Corporation of the United States, also stated that its few gas stations in the UK were also affected by distribution problems.

[Japanese Prime Minister Yoshihide Suga is about to step down, and I said I will not serve in the new cabinet]
According to Japanese media reports, on the morning of the 25th local time, Japanese Prime Minister Yoshihide Suga, who was visiting the United States, stated in Washington, the United States that he himself would not serve in the new cabinet after leaving office. According to reports, the result of the election of the president of the Liberal Democratic Party of Japan will be on the 29th, which also means that Yoshihide Suga's term as prime minister is coming to an end. In this regard, Suga Yoshihide said on the same day that after the election results are released, even if the next prime minister intends to invite him to serve in the cabinet, he will not accept it. (China News Service)

[During the recovery period after the epidemic, the plight of small businesses in the United States continues to arouse concerns]
① Even though the US federal government and state governments provide all the economic assistance, small businesses still face considerable resistance. The latest small business optimism index released by the National Federation of Independent Business (NFIB) actually found that the optimism of small business owners has improved. The August index shows that optimism has risen by 0.4%. However, its NFIB uncertainty index dropped by 7 points to 69 points, which is the lowest level since January 2016, which is a frustrating sign that the anxiety of small business owners is rising. ② At the same time, Goldman Sachs' latest "Voice of Ten Thousand Small Businesses" survey found that 44% of small business owners have less than three months of cash reserves. Most financial experts recommend at least three to six months of cash reserves. ③ Joe Wall, managing director of government affairs at Goldman Sachs, said: “Economic headwinds related to the epidemic have hit small American businesses in the past 18 months.” Although many stores have reopened, small businesses across the country The Lord sent a clear signal that they need more relief to continue on the path of recovery."

[The net long US dollar position of speculators increased to US$14.28 billion in the past week]
①According to data released by the US Commodity Futures Trading Commission (CFTC) last Friday, the scale of net long US dollar positions held by speculators has increased in the past week. ②As of the week of September 21, the US dollar net long position increased to 14.28 billion US dollars, compared with 99.9 billion US dollars in the previous week. ③The US dollar position of the Chicago International Moary Market is calculated based on the net positions of the six major currencies, the Japanese yen, the euro, the British pound, the Swiss franc, the Canadian dollar and the Australian dollar. ④ A broad indicator covering the net position of the US dollar against the New Zealand dollar, the Mexican peso, the Brazilian real and the Russian ruble shows that the net long US dollar position in the last week was US$13.45 billion, the highest since March 2020. The previous week For 9.12 billion U.S. dollars.

Domestic financial information

[Statement on Meng Wanzhou and the U.S. Department of Justice reached a deferred prosecution agreement (DPA)]
Lawyer Meng Wanzhou William W. Taylor, III issued a statement: I am very pleased that Ms. Meng Wanzhou has reached a deferred prosecution agreement with the U.S. Department of Justice, and the agreement has been approved by Judge Ann M. Donnelly of the Eastern District of New York. According to the terms of the agreement, she will not be further sued by the United States, and Canada's extradition process will be terminated. Ms. Meng has not pleaded guilty, and we look forward to the fact that the charges against her will be completely dropped in 14 months. Now, she is about to regain her freedom and go home to reunite with her family. (CCTV News)

[Northbound Funds: This week's scandal focuses on exposure, Wuliangye's net purchase of more than 1.4 billion yuan]
On the three trading days of this week, Northbound funds sold a total of 1.579 billion yuan this week, of which the Shanghai Stock Connect net sales exceeded 2.8 billion yuan, and the Shenzhen Stock Connect net purchases exceeded 1.2 billion yuan. The top three net purchases were Wuliangye, Sungrow Power, and Kweichow Moutai, with net purchases of 1.484 billion yuan, 1.105 billion yuan, and 791 million yuan. The top three net sales were China Merchants Bank, Ping An of China, and Ping An Bank, with net sales of 1.831 billion yuan, 1.458 billion yuan, and 1.390 billion yuan. (One fortune)

[19 provinces began to collect Chinese patent medicines]
The Hubei Province Pharmaceutical Price and Bidding Procurement Management Service Network issued the "Announcement of Centralized Procurement of Proprietary Chinese Patent Medicines (No. 1)". The "Announcement" pointed out that this procurement alliance is composed of 19 provinces and regions including Hubei, Hebei, Shanxi, etc. The scope of participating in the mass procurement of Chinese patent medicines includes all public medical institutions in the alliance area. Medical insurance designated social medical institutions and designated pharmacies are encouraged to run medical institutions and designated pharmacies in accordance with their locations. Participate in relevant regulations of the alliance area.

[Guangdong: Actively respond to the recent shortage of power supply]
According to the news from the Development and Reform Commission of Guangdong Province, all cities in Guangdong province have launched an orderly power utilization plan. Many industrial enterprises in the province have "opened three and stopped four" or even "opened two and stopped five". The normal production and operation activities of enterprises have brought certain influence. Guangdong has actively responded to the recent shortage of power supply, taking measures to ensure the supply of electric coal, the supply of natural gas, the promotion of key power projects and the construction of transmission projects. With the efforts of all parties, the tight power supply situation is expected to gradually ease.

[The spokesperson of the Ministry of Transport Sun Wenjian introduced at a press conference of the State Information Office on the 26th that as of now, 439 charging piles have been added to the expressway service area this year, and the cumulative number of charging piles in the expressway service area has reached 10,836. 】(Xinhua Finance)

[Report: China's 5G network construction speed and scale are the first in the world]
On the 26th, the "World Internet Development Report 2021" and "China Internet Development Report 2021" blue book press conferences were held in Wuzhen, Zhejiang. The Blue Book pointed out that China's Internet infrastructure construction is steadily advancing, and the construction of mobile infrastructure and application infrastructure is accelerated. Among them, China's 5G network construction speed and scale rank first in the world. According to statistics, as of June 2021, the total number of 5G base stations in China has reached 961,000, achieving full coverage in all cities above the prefecture level.

[Beijing Stock Exchange's first network-wide test ends, and the brokerage APP adds "Beijing Securities Trading Zone"]
On September 25, the Beijing Stock Exchange conducted the first network-wide test. This time, it mainly tested the technical preparations of various market participants for the opening of the Beijing Stock Exchange, with the participation of the Beijing Stock Exchange, clearing companies, and securities firms. It is understood that this test simulated a complete trading day, including call auctions before the market, continuous auctions after the market opened, call auctions after the market closed, block trades, etc. Under the test environment, many brokerages have modified the APP. Some brokerages have added a "Northern Securities Trading Zone" to the APP to facilitate customers to quickly understand the trading rules, investment and education content of the Beijing Stock Exchange, as well as the transactions of the Beijing Stock Exchange. Entrance, permission opening entrance, etc. (Broker China)

[Huawei releases new operating system openEuler]