Key international financial events this week include: the US will release September non-farm payrolls data, the September ISM manufacturing and non-manufacturing index, while a number of officials who hold voting rights on the Federal Open Market Committee this year making speeches one after the other. , China manufacturing data will also be released. In addition, the new British Prime Minister, Truss, Chancellor of the Exchequer Quateng will speak this week.
This week’s trading notes (1003-1008)
1. US September nonfarm payrolls report
The US will publish the number of non-farm payrolls added in September on Friday (7th) The current market expectation is 250,000, the previous value was 315,000. This employment data will also be used by Federal Reserve officials to raise interest rates. As part of the address, the ADP employment report, known as the “small non-farm payrolls” report, will be released on Thursday, adding 200,000 jobs, compared to the previous figure of 132,000 .
The US core personal consumption expenditure (PCE) price index accelerated in August, and the number of people receiving unemployment benefits fell below 200,000 to a 5-month low. Both data highlight that inflation is still heating up and the job market is stable, which could increase the momentum of an Aggressive Fed rate hike.
In addition, several Fed officials have released hawkish signals last week. Among them, the Fed’s “second-in-command” Lael Brainard believes that, in order to reduce inflation, interest rates need to remain high for a while of time, and to avoid premature The rate cut strengthens market expectations for the Fed’s next rate hike. The market currently expects the Fed to raise interest rates by 3 yards (75 basis points) and 2 yards (50 basis points) in November and December, respectively.
This week, a number of Fed officials who hold voting rights this year will also speak one after the other, including Kansas Fed President George, New York Fed President Williams, and Cleveland Fed President Mester Views of current officials In general similarly, support for continued interest rate hikes to cool 40 years of high inflation in the United States.
2. manufacturing boom in Asia and Europe
The US will release back-to-back manufacturing sentiment data this week, including the final September manufacturing Purchasing Managers’ Index (PMI) and the September ISM manufacturing and non-manufacturing indexes. The market expects the September ISM manufacturing index and non-manufacturing index to be 51.8 and 56.5, respectively, compared to previous values of 52.8 and 56.9.
Last week, the United States published the initial value of the manufacturing PMI for September, showing that business activity contracted for the third consecutive month, but the rate of contraction has moderated. With the supply chain improving order growth and inflation softening further, the market has eased concerns about a sharp contraction in business activity.
On the other hand, US ISM manufacturing and non-manufacturing industries continued to grow in August, and two reports also revealed the message of slowing inflation. The former’s price index fell again to a new low since June 2020, the fifth in a row The latter’s raw material price index fell to its lowest level since January 2021.
The eurozone will also release September’s final manufacturing PMI after a preliminary survey showed economic activity in the eurozone slowed again in September, deepening recession fears. China will also publish the Caixin Services PMI and Composite PMI on Saturday (7th).
3. The British Prime Minister, Truss, Chancellor of the Exchequer, spoke
The new British Prime Minister Liz Truss and the new British Chancellor of the Exchequer Kwasi Kwarteng will speak on Wednesday (5th) and Monday (3rd) respectively. The tax plan caused volatility in financial markets that attracted international attention, and Truss later defended the policy. , saying it was urgent action that had to be taken, stressing that tax cuts would help boost long-term economic growth and that maintaining high tax rates would lead to a recession. So be prepared to make controversial and difficult decisions.
The UK tax cuts have caused the market to lose confidence in UK assets, leading to a sharp fall in government bond prices and a collapse in the pound. The rise in bond prices triggered unprecedented profit calling for the UK’s pension funds. UK, which could lead to a crash in the bond market, and then the Bank of England (BOE) announced an emergency bond purchase plan to save the market.
4. China, Hong Kong and South Korea closed
China brought a week-long National Day holiday, so the market will be closed for a week, the Hong Kong stock market will also be closed for one day on Tuesday (4th), and South Korea will be closed on Monday for the opening. day leave