Markets Weekly September 28, 2024

Hello my friends, today is September 28th and this is Markets Weekly. So this past week we got a lot of exciting developments in markets, although the major equity indexes didn't move too much. As many of you know, there is a large gamma pin on the S&P 500, so it's unlikely to move much until after Monday. So today let's talk about three things. First and foremost, we have to talk about the Chinese stimulus that is just rocketing through global markets. Secondly, although China is stimulating and we have geopolitical risks heating up, it doesn't seem like oil prices are very excited. So let's talk about how supply concerns seem to be weighing down on oil. And lastly, let's talk about how the Swiss National Bank and the European Central Bank are becoming increasingly davish.

你好，朋友们，今天是9月28日，欢迎收看本周市场回顾。上周市场出现了许多令人兴奋的变化，尽管主要股指并没有大幅波动。正如许多人知道的那样，标普500指数有一个大的伽玛阻力位，所以在周一之前不太可能有大的波动。那么今天我们来讨论三个方面的内容： 首先，我们必须谈谈目前正快速影响全球市场的中国刺激政策。 其次，尽管中国在进行经济刺激，并且地缘政治风险不断升温，但油价似乎并不太受影响。让我们谈谈供应方面的问题是如何影响油价的。 最后，我们需要讨论一下瑞士国家银行和欧洲中央银行越来越宽松的货币政策。 希望这些话题对大家有所帮助。

Alright starting with China. So as we discussed last week, the Chinese economy has not been doing well largely because of the implosion in their property sector. Now the Chinese government has refrained from doing a lot of big stimulus because President Xi seems to have a philosophy that is just not the direction they want to go in. This past week, it seems like the government over there is changing their mind because we had two announcements both on the monetary stimulus front and on the fiscal stimulus front. And to show you the effects, let me just show you this chart of the Chinese stock market index. It looks like it went straight up. And actually it's up 15% in just a week. Obviously, that's a tremendous, tremendous amount.

好的，从中国开始。正如我们上周讨论的，中国经济最近表现不佳，主要是因为房地产行业的崩溃。中国政府一直避免采取大规模的刺激措施，因为习近平主席似乎认为这不是他们想要走的方向。然而，上周的情况似乎发生了变化，因为政府在货币和财政刺激方面都发布了两个公告。为了展示效果，我给你看这张中国股市指数的图表。看起来股市直线上升，实际上在一周内上涨了15%。显然，这是一个非常非常显著的涨幅。

Now let's start with the monetary stimulus they've announced. As usual, that means rate cuts, right? And the People's Bank of China has been more forceful in saying that they're going to offer monetary easing. But they also rolled out something new that is pretty interesting and that is a new lending facility to support the stock market. Now when your stock market is going down, the central bank obviously has a lot of ways to make it go up. Obviously you can cut rates and usually rate cuts make the stock market happy. Sometimes though, there are a lot of other concerns. Maybe rate cuts is not enough. And so even as the People's Bank of China has been cutting rates for some time, the Chinese stock market has not done well. Another thing you could do is suggest to have this under your bank straight out in buy stocks. And that's what the Bank of Japan did for some time. The People's Bank of China seems to be choosing somewhat of a middle path by offering this new financing facility that basically offers cheaper loans when you pledge stock as collateral. So in a sense, you can think about this through the banking sector offering investors cheaper margin loans to buy stocks in China. Again, cheap financing plus the People's Bank of China explicitly rolling out this facility is helping investors sentiment. So much so that you even have famous investors like David Tepper going on TV and saying he's buying everything China related. So that's on the monetary stimulus front.

现在让我们来谈谈他们宣布的货币刺激措施。像往常一样，这意味着降息，对吧？中国人民银行已经更强有力地表示将进行货币宽松。但他们还推出了一项新措施，这非常有趣，那就是一个新的借贷工具，用来支持股市。当股市下跌时，中央银行显然有很多方法让它回升。显然，你可以降息，通常降息会让股市感到满意。但有时，还有很多其他问题。也许降息还不够。所以即使中国人民银行已经降息一段时间了，中国股市表现仍然不佳。另一个办法是建议银行直接购买股票。这就是日本央行曾经做过的。中国人民银行似乎选择了一条中间道路，通过提供这种新的融资工具，基本上是当你以股票作抵押时，提供更便宜的贷款。因此，从某种意义上说，你可以认为这是通过银行部门向投资者提供更便宜的保证金贷款以购买中国股票。同样，便宜的融资加上中国人民银行明确推出这一工具，正在提升投资者的情绪。甚至有像大卫·泰珀这样著名的投资者在电视上说他在买入所有中国相关的东西。所以这是关于货币刺激方面的措施。

On the second front that I think is more interesting is that the Chinese seem to be more interested in fiscal stimulus. Again, fiscal stimulus as we've seen recent years is in many cases much more influential than monetary stimulus because then the government is actually spending money rather than just toggling interest rates and whatnot. So the Chinese government is suggesting that they're going to do more fiscal stimulus, some estimates, a few hundred billion worth in dollars. And of course, there's language suggesting that they are going to prevent declines in the property markets. Again, there's not a lot of detail yet, but a lot of people are really happy to hear this because it shows that the government is changing their mind. Maybe this is the beginning of more measures and a few hundred billion dollars worth of stimulus. You know, it's not that much when you look at the size of the Chinese economy, but maybe it's the beginning of more. Something else that's also interesting is that the Chinese government is actually announcing checks to people who are suffering very low income people. Again, that's not quite on the scale of the helicopter checks we saw from President Biden, but it's also a change in policy. Now, some Bloomberg analysis is showing that the amount of money that's actually going to be sent out is not a lot and it's not going to be to a lot of people, but the markets are really liking this, again, suggest a potential shift in policy.

在第二个我觉得更有趣的方面，中国似乎对财政刺激更感兴趣。近年来我们看到，财政刺激在许多情况下比货币刺激更有影响力，因为政府实际在花钱，而不仅仅是调整利率等。所以中国政府建议将会采取更多的财政刺激措施，有些估计认为规模达到数千亿美元。当然，还有一些言论表示他们将防止房地产市场的下滑。目前细节还不多，但很多人对这一消息表示高兴，因为这表明政府正在改变他们的思路。这也许是更多措施的开始，几百亿美元的刺激，相对于中国经济的规模来说可能不算多，但可能是一个开始。 还有一件有趣的事情是，中国政府实际上宣布向收入非常低的人发放支票。虽然这不及拜登总统发放的“直升机支票”规模，但也是一种政策上的改变。一些彭博社的分析显示，实际发放的金额并不多，受益的人也不会很多，但市场对此反应积极，再次暗示了政策可能发生转变。

Now, when the Chinese economy is being stimulated, that, of course, has reverberations throughout the entire world. Looking at global commodity prices, for example, Chinese China, biggest consumer of raw commodities, especially things like base metals, you can see copper pricing, copper pricing taking a leg higher. And also encouraging for risk sentiment in the US and in Europe. You can see luxury brands like Louis Vuitton going basically straight up since Chinese stimulus, as many of you know, Chinese really, really like luxury goods. And another place you would expect to see very direct Chinese impact would be, say, its neighbors in Asia, like Japan. And that is actually initially what happened if you look at this chart of Nikkei futures and Nikkei futures were basically straight up at this news.

现在，当中国经济受到刺激时，这当然会在全世界产生回响。看看全球商品价格，例如，中国是最大的原材料消费国，尤其是基本金属类的东西，你可以看到铜价上涨。而且这对美国和欧洲的风险情绪也是一种鼓舞。你可以看到奢侈品牌如路易威登自中国刺激经济以来，股价基本上一路上升，毕竟大家都知道中国人非常喜欢奢侈品。另一个你期待看到中国影响的地方会是它的邻国，比如日本。而如果你看这张日经期货的图表，你会发现实际上刚开始的时候确实如此，日经期货应此消息而基本上直线上涨。

But unfortunately, there were also other events involved as well. In addition to Chinese stimulus, we also had elections in Japan and it looked like the outcome surprised markets were as the person who is now the new premier prime minister of Japan is someone that the market did not expect. Prime Minister Ishida appears to be perceived as more of a hawk of monetary policy. And so the market is thinking that he is not going to be more open to the Bank of Japan on normalizing interest rates. And so at his election, despite all this China stimulus news we saw first, the Japanese yen again, appreciate significantly and the Nikkei futures absolutely tanked 6% from their highs, 6%. So I think they're open this next week is going to be really fascinating.

但是不幸的是，还有其他一些事件也发生了。除了中国的刺激措施外，我们还进行了日本的选举，而选举结果似乎出乎市场的意料。在选举中获胜并成为日本新任首相的人选并不是市场所预期的。首相石田被认为在货币政策上更加强硬。因此，市场认为他不会对日本央行的利率正常化持更开放的态度。因此，尽管有中国的刺激措施新闻，我们看到选举后日元再次显著升值，而日经指数期货从高点暴跌了6%。我认为接下来的一周将会非常有意思。

Now one thing I would like to highlight is all these changes in the markets the past week from Chinese stimulus to Japanese elections are political developments. Politics and markets are deeply intertwined and at times the largest driver of movements and markets. So oftentimes up here, people complaining how can you talk politics and markets. Man, if you don't talk politics and markets, if you don't have a view of what public policy is, you are not going to make it seriously. Politics drives markets increasingly so. And when we look to a November election, I think that's going to have a huge impact on the trajectory of markets going forward. So pay attention very closely to political developments.

现在我想强调一点，过去一周市场中的所有变化，从中国的刺激政策到日本的选举，都是政治发展的结果。政治和市场是紧密相连的，有时甚至是市场波动的最大驱动因素。因此，经常有人抱怨我们怎么能同时谈论政治和市场。朋友，如果你不谈论政治和市场，如果你对公共政策没有看法，那你就不会认真地抓住市场动向。政治对市场的影响日益显著。当我们展望11月的选举时，我认为这将对未来市场的走向产生巨大影响。所以请非常密切地关注政治动态。

Now one thing that was really interesting about all this Chinese stimulus is that although it pumped commodity prices a lot, it actually didn't seem to do that much with oil, which leads us to our next topic. Now looking at oil prices the past few months, you'll notice that oil just can't seem to get a bid. It keeps going down lower and lower. And that's kind of strange because on the one hand, you have very obvious heating up of geopolitical conflicts. As I record this, we just have this huge, huge military strike of Israel against Hezbollah and Lebanon. And so there's a lot of things that are happening there and you would expect there to be more of a geopolitical premium, as has usually been the case. In addition to that, obviously China, one of the largest consumers of oil in the world, is doing fiscal stimulus, you would expect oil prices to go up as well.

现在，有一件事非常有趣，就是虽然中国的刺激措施大大推动了大宗商品价格，但实际上对原油价格影响不大，这引出了我们的下一个话题。回顾过去几个月的油价，你会注意到油价似乎一直无法反弹，不断走低。这有点奇怪，因为一方面，地缘政治冲突明显加剧。当我录这段话时，以色列刚刚对真主党和黎巴嫩进行了大规模的军事袭击。因此，那里发生了很多事情，你会预期地缘政治因素会导致油价上涨，这是常见情况。此外，中国作为全球最大的石油消费国之一，正在进行财政刺激，本应导致油价上涨。

But oil prices are not going up and it seems like a big part of that is supply concerns. Now there's some interesting reporting from the Financial Times the past week, from the Financial Times the past week about Saudi Arabia, basically telling everyone they're going to pump more oil. Now if we rewind a bit over the past couple years, Saudi Arabia has been trying to keep oil prices high. Now they got together with OPEC Plus and saying that, you know, guys, we have a lot of market power. We don't oil on oil prices to be too low. That impacts our revenue. So let's cut some production and try to manage oil prices so that they're at least very stable. But as they did this, and Saudi Arabia showed it a lot of the cuts, a couple of things happen. It was difficult to police the cuts from other countries that seem to be cheating and you have increased production from other players like the US and Canada.

但油价并没有上涨，其中一个主要原因似乎是供应问题。上周《金融时报》有一些有趣的报道，说沙特阿拉伯基本上向所有人表明他们将会增加石油产量。如果我们回顾过去几年，沙特阿拉伯一直在尝试保持油价高企。他们与欧佩克+（OPEC Plus）合作，并表示我们在市场中有很大的影响力，不希望油价过低，因为这会影响我们的收入。所以让我们削减一些产量，尝试管理油价，至少保持其稳定。然而，在他们这样做的过程中，沙特阿拉伯承担了大量减产，但出现了几个问题。首先，很难监管其他似乎在作弊的国家的减产，其次，美国和加拿大等其他国家增加了产量。

And so Saudi Arabia seems to be basically giving up on policing oil prices and now is more concerned about market share. So they're telling everyone that those cuts that they had, they're going to roll them back. So the market is becoming increasingly concerned about an oversupply of oil, not just this, not just this coming year, but also next year as you have more and more projects, let's say offshore projects that are coming online. So it looks like we are in a place where oil prices are probably going to be low for some time until things change. Of course, many things change, but I think that's something to watch out with because when it comes to oil, it has a really big impact on inflation. Historically speaking, if you look at things like interest rates or break even inflation expectations, they're close to the price of oil where higher oil leads to higher perceived inflation and thus higher interest rates. And now we have this big disinflationary force that's happening simply through a big supply increase. All right.

因此，沙特阿拉伯似乎基本上放弃了控制油价，现在更关心市场份额。因此，他们告诉大家之前的减产措施将被取消。这使得市场越来越担心石油供应过剩，不仅是今年，明年也一样，特别是更多的项目（比如海上钻井项目）即将上线。所以油价可能在一段时间内都会保持较低水平，直到局势发生变化。当然，许多事情都会变，但这是需要注意的问题。因为谈到石油，它对通货膨胀有很大的影响。从历史上看，如果你观察利率或通胀预期，它们通常与油价密切相关，油价上涨会导致通胀预期上升，从而利率升高。现在我们正面临一个巨大的通货紧缩力量，因为供应量大幅增加。好的。

The last thing that I want to talk about is what's happening with the some, with a couple European central banks. Now this past week, the Swiss National Bank cut interest rates again. And more interestingly, they seem to be hinting that they're going to cut interest rates again and also they've significantly realized lower their expectations of the path of inflation. Now Switzerland is a is again, every country is different. Now one thing to keep in mind when you're looking at Switzerland is a key mechanism of monetary policy is their interest rate. Now Switzerland in the middle of the European Union obviously is significantly impacted by the interest rates, by exchange rates. So they export a lot of things to the European Union and they import a lot of things to the European Union. Now over the past few months, we've seen their currency strengthen significantly in part due to say, flight to safety. Now that's been a big problem for them because when their currency strengthens a lot, it makes their exports less competitive and it also makes their import prices decline a lot. And so it's putting a lot of downward pressure on inflation. So what the Swiss National Bank is telling you is that they're very likely going to continue to cut interest rates and who knows, maybe they even go back to zero. But we have to be careful though, the Swiss National Switzerland is, you know, they have their own idiosyncratic economy. It's not necessarily, I wouldn't take signals away from this to imply that other major center banks may go back to zero.

最后，我想谈一谈一些欧洲央行的最新动态。过去一周，瑞士国家银行再次下调了利率。更有趣的是，他们似乎暗示将再次降息，而且他们大幅降低了对通胀路径的预期。 每个国家都有其独特的经济状况，瑞士也不例外。在分析瑞士时，需要记住一个关键的货币政策机制是其利率。瑞士地处欧盟中部，显然受利率和汇率的显著影响。他们向欧盟出口大量商品，同时也从欧盟进口许多东西。 过去几个月，瑞士货币显著升值，部分原因是资金避险的趋势。货币升值对瑞士是个大问题，因为这会使他们的出口竞争力下降，同时进口价格大幅下降，从而对通胀产生很大的下行压力。因此，瑞士国家银行表示他们很可能会继续降息，甚至可能降回零利率。 不过需要小心的是，瑞士有其独特的经济体系。我不会因此推断其他主要央行也会回到零利率。

But the ECB though, this past week also sent out some pretty dovish noises. Now, ECB executive members about Schnabel gave a really interesting speech and had a lot of slides that seem to suggest that the ECB is becoming more and more concerned about growth. Now, to be clear, the ECB does not have an employment mandate. They are an inflation mandate bank, but can center banks always care about the economy. Now, the takeaway from the presentation seems to be that, well, inflation in the Eurozone is getting closer and closer to target. We've had significant disinflation over the past couple of years. However, the growth is becoming more concerning. Now, if you look at real growth for the Euro area over the past couple of years, it's basically gone nowhere. It's stagnated. Whereas in the US, for example, the US continues to have pretty good growth. And if you look at, say, maybe potentially forward-looking data like PMI indicators, PMI data in the Eurozone has been trending lower and lower, that's telling you that businesses are thinking things are not getting better.

不过，欧洲央行在过去的一周也释放了一些较为鸽派的信号。欧洲央行执行委员施纳贝尔发表了一篇非常有趣的演讲，并配有很多幻灯片，似乎暗示欧央行对经济增长越来越担忧。需要明确的是，欧洲央行并没有就业这一职能目标，他们的主要任务是控制通货膨胀，但央行始终关心经济状况。演讲的主要信息是，欧元区的通胀正在逐渐接近目标，过去几年已经有了显著的通缩。不够令人担忧的是，经济增长却令人担忧。回顾过去几年的欧元区实际增长，基本上停滞不前。相比之下，美国在此期间仍保持了相当良好的增长。如果你查看一些前瞻性的数据，比如采购经理人指数（PMI），欧元区的PMI数据一直在下降，这表明企业普遍认为情况并没有好转。

So there seems to be more of a concern about economic growth in the Eurozone. And at the same time, when you look at measures of inflation, let's say economists care a lot about inflation expectations in the Eurozone, they seem to be hitting lower. So the ECB seems to be in gear to be more confident that inflation is getting to where they want and seem to be switching gears a little bit to be a bit more concerned about growth. And that is leading to more and more speculation that the ECB may cut rates again as soon as October. So globally, again, this rate cut cycle is continuing among central banks and actually seems to be accelerating. And that is going to be something we can, I just think, look forward to. I think there's also additional speculation that even the Bank of Australia, the Reserve Bank of Australia, will be cutting rates as well. All right.

因此， Euro区的经济增长似乎引起了更多关注。与此同时，当你观察通胀的衡量标准时，比如说经济学家非常关注Euro区的通胀预期，似乎在下降。所以欧洲央行似乎对通胀达到了他们的目标更有信心，并且似乎正在转向更加关注经济增长。这导致了越来越多的猜测，认为欧洲央行可能最早在10月再次降息。因此，从全球来看，央行的降息周期在持续，实际上似乎在加速。我认为这是我们可以期待的事情。我还认为有额外的猜测认为甚至澳大利亚央行也会降息。好的。

So that's a lot prepared for this week. Thanks so much for tuning in. If you're interested in my latest thoughts this week, I'm going to write about what could potentially blow up the Treasury market based on what I'm hearing from the Treasury market conference at the Fed last week. And of course, if you're interested in learning more about market markets, check out my online courses at centralbaking101.com. And of course, for you to check out monitoringmacro.com. All right. Talk to you all next week.

所以本周已经准备了很多内容。非常感谢大家的收听。 如果你们对我本周的最新看法感兴趣，我将会写一些关于上周在美联储的国债市场会议上听到的信息，以及这些信息可能会对国债市场产生什么影响。 另外，如果你们想了解更多关于市场运作的知识，可以看看我在centralbaking101.com的在线课程。 当然，也不要忘了访问monitoringmacro.com。 好的，那我们下周再见。