Markets Weekly December 9, 2023

Hello my friends, today is December 9th and this is Markets Weekly. So this week we got some pretty interesting developments in markets so we have a lot to talk about. First, let's talk about the labor market. This past week we got joltstata and we got the very important non-farm payrolls report. Let's discuss what those reports are saying about the labor market.

大家好，今天是12月9日，这里是《市场周报》。这周市场出现了一些非常有意思的变化，我们有很多话要说。首先，让我们来谈谈劳动力市场。上周，我们获得了Joltstata和非农就业报告，这些报告对劳动力市场有重要的意义。让我们来讨论一下这些报告对劳动力市场的看法。

Secondly, the market has for some time been anticipating a quote unquote ECB pivot. This past week a senior ECB official gave an interview that seems to suggest what the market has long suspected that maybe the pivot is in and the ECB rate hike cycle is over.

其次，市场早已预期欧洲央行（ECB）将进行所谓的方向转变。上周，一位高级ECB官员接受采访，似乎暗示了市场长期以来所怀疑的情况，即可能已经进行了转变，ECB加息周期已经结束。

And lastly, let's talk about another pivot happening. Now we know central banks around the world have been pivoting but they're not all pivoting in the same direction. We got some reports that the Bank of Japan may finally be willing to hike interest rates. Let's talk about what that means for global markets.

最后，让我们谈谈另一个转变正在发生的事情。现在我们知道全球各国央行一直在调整，但它们并不都在朝着同一个方向调整。我们收到了一些报道称日本银行可能终于愿意提高利率。让我们来谈谈这对全球市场意味着什么。

Okay, starting with the jobs data. So this past week we first got the jolt's report. So joltst basically shows the number of job openings in the US. Now the jolt's data itself shows a significant decline in the number of job openings. Now you might think that that is a bearish development but if you zoom out a bit you note that the amount of job openings in the US right now is far, far above levels that prevailed before 2020. So it seems like the job market is cooling but it's merely going from super hot to modestly hot. And this is actually squarely in soft landing territory.

好的，从就业数据开始说起。所以在过去的一周里，我们首先获得了《激流报告》。《激流报告》主要显示美国的职位空缺数量。现在，《激流报告》的数据本身显示了职位空缺数量的显著下降。现在你可能认为这是一个熊市的发展，但如果你放大一点，你会注意到现在美国的职位空缺数量远远高于2020年之前的水平。所以看起来就业市场正在降温，但只是从极度火爆转为适度火爆。实际上，这正好是软着陆区域所在。

Now let's rewind a little bit. So a year or two ago the economy was roaring hot, inflation was skyrocketing and wages were red hot as well. The Fed hiked interest rates trying to get inflation down in part by cooling labor market. The Fed was thinking that if the labor market cooled down wage growth would moderate and maybe inflation would come down as well. Now one way the labor market cool is if we have a rise in unemployment. That's what has happened typically in the past.

现在让我们倒回去一点。一两年前，经济景气繁荣，通货膨胀飙升，工资也非常高涨。美联储提高了利率，试图通过降低劳动力市场繁荣来控制通货膨胀。美联储认为，如果劳动力市场冷却下来，工资增长将适度放缓，或许通胀也会下降。过去，一种劳动力市场冷却的方式是失业率上升。这通常就是过去发生的情况。

So the playbook would be Fed hiked rates, economy slows, unemployment rate rises and wage growth comes down. But that's not the only way this could happen. Another way this could happen is simply that demand for labor moderates. For example, let's say you have a worker and he gets 10 job offers. Well, obviously if 10 companies are bidding for his services then there could be a bidding war and wages will grow at a fast pace. But let's say in that same scenario instead of 10 companies bidding for a worker, let's say the worker only has five companies bidding for his services. In that case, well, the worker still remains employed but maybe he doesn't have as large as amount of wage growth. And that seems to be what's happening right now as suggested by the Joltz data. Again, the economy is slowing but the labor market of course remains much hotter than it was before 2020. So so far, squarely in soft landing.

因此，执行计划是美联储加息，经济放缓，失业率上升，工资增长下降。但这不是唯一的可能。还有一种可能的情况是劳动力需求变得适度。例如，假设有一个工人，他收到了10个工作机会。很显然，如果有10家公司争夺他的服务，可能会出现竞争购买，工资将以快速的速度增长。但是，如果在同样的情况下只有5家公司争夺该工人的服务，那么工人仍然保持就业，但可能没有那么大的工资增长。根据《Joltz数据》的提示，似乎现在正在发生这种情况。再次强调，经济正在放缓，但劳动力市场当然比2020年之前更加热。因此，到目前为止，仍然符合软着陆的预期。

And this is consistent with what we saw in the non-farm payroll report which suggests a strong labor market. Now when we look at the NFP data, there's a few things we want to focus on. First of course, what everyone focuses on is the headline number. We got 199,000 jobs created a bit above expectations. Now as an economy, we need about 100,000 jobs growth per month to meet the increase in our workforce. So 199,000 is comfortably above that. Now where are the 99,000 people coming from them? Well that brings us to our next focus point, the labor force participation.

这与我们在非农就业报告中观察到的情况是一致的，表明劳动力市场强劲。现在当我们看非农就业数据时，有几个要重点关注的方面。首先当然是每个人关注的总体数字。我们获得了199,000个新增就业岗位，略高于预期。作为一个经济体，我们每个月需要约10万个就业增长，以满足劳动力的增长需求。所以199,000个就业岗位完全超出了这个需求。现在这99,000人是从哪里来的呢？那就是我们接下来关注的重点，劳动力参与率。

In this report, we clearly see that labor force participation continues to increase. That means there are more people willing to work increasing the supply of labor. That again is good for the economy as when you have more people working, you have more growth. Now why are more people participating in the labor force? Well that could be because wage growth remains solid. So the third thing we want to look at is the growth in wages. Both in wages 4% is higher than expected and elevated compared to pre-2020 trends. So again, this still suggests that there is strong demand for labor.

在这份报告中，我们清楚地看到劳动力参与率持续增加。这意味着愿意工作的人越来越多，劳动力供给增加。这对经济来说是有利的，因为当你有更多人在工作时，就会有更多的增长。那么为什么有更多的人参与劳动力呢？嗯，这可能是因为薪资增长保持稳定。所以我们要看的第三个问题就是薪资增长。无论是在工资还是在4%的增长都超出了预期，相比2020年前的趋势也有所提高。所以，这仍然表明劳动力需求强劲。

After all, wage growth remains comfortably above pre-2020 trends and also now that inflation has come down, wage growth is above inflation. Now the last thing we want to focus on in this non-form period report is the unemployment rate. Now there's a lot of people paying special attention to this because of something called the SAM rule, which is a rule created by Claudia Sam, a former economist at the Federal Reserve.

毕竟，工资增长仍然舒适地高于2020年前的趋势，而且现在通胀已经下降，工资增长高于通胀。现在，在这份非正式时期的报告中，我们想要关注的最后一件事是失业率。现在有很多人特别关注这一点，因为有一个叫作"萨姆规则"的规则，这个规则是由前联邦储备银行经济学家Claudia Sam创造的。

What Claudia noticed was that there seems to be momentum in the unemployment rate. So when the unemployment rate trends higher, it tends to continue to move higher. So she looked at this empirical observation, created some calculations, and under her rule, when the SAM rule was triggered, historically speaking, the economy is always in recession. So if you look really closely at the unemployment rate over the past few months, you notice that the unemployment rate has been gradually trending higher. So a lot of people were focusing on this at this report, thinking that if the unemployment rate continues to trend higher, well, you know, that means the SAM rule is going to be triggered quickly, and then the economy could be in recession.

克劳迪娅注意到一件事，失业率似乎有一股势头。因此，当失业率上升时，它往往会继续上升。所以她根据这个经验观察，进行了一些计算，并根据她的规则，按照历史来看，当SAM规则被触发时，经济总是陷入衰退。因此，如果你仔细观察过去几个月的失业率，你会发现失业率一直在逐渐上升。所以很多人在这份报告上都在关注这一点，认为如果失业率继续上升，那么就意味着SAM规则将很快被触发，经济可能会陷入衰退。

Again, there have been many, many people who have been watching for recession for two years, and that just doesn't seem to happen. And based on this report, it looks like it's going to be some ways away as well, because in this report, the unemployment rate actually ticked lower. So under the SAM rule, the recession is going to be farther away than expected. And indeed, as we've been discussing, you know, economic growth is solid, and wage growth is solid as well. And in this week's blog post, I will write about taking a deep dive into credit. Credit looks solid as well. So all in all, there doesn't seem to be any indication of recession. Of course, we will have a recession. It's like death in taxes. It will eventually come, but right now it doesn't seem to be close based on what I see.

再说一次，已经有很多人观察了两年的衰退，但似乎并没有发生。根据这份报告，看起来衰退还有一段时间，因为在这份报告中，失业率实际上有所下降。所以根据SAM规则，衰退将比预期更遥远。而且，正如我们一直在讨论的，经济增长是稳固的，工资增长也是稳定的。在本周的博客文章中，我将深入探讨信贷问题。信贷状况也很稳固。总的来说，没有任何衰退的迹象。当然，我们将会有一次衰退。这就像死亡和税收一样。它终将到来，但根据我所见，现在似乎并不接近。

Okay. Now, the next thing I want to talk about is the Quina code ECB pivot. Now, the market, looking at market pricing, has been suggesting that the ECB is probably done with their rate hikes. The market has seen that the Eurozone is probably in recession. Their growth numbers have not been good and inflation has coming in lower than expected. So based on that logic, it seems like the ECB shouldn't be raising rates anymore. Now, that's what the market has been expecting. And we know this by looking at short-term interest rate futures. And this week, we seem to finally get confirmation that that is indeed the case. Isabelle Chnable, a very senior ECB official and someone who is doing a very good job, gave an interview this past week with Reuters and she opened up with the mobile line from Keynes that when the facts change, I change my mind, which is how we should all behave.

好的。现在，我想谈谈的是欧洲央行的昆纳码ECB轴心转变。根据市场定价，市场显示欧洲央行可能已经停止加息。市场观察到欧元区可能处于衰退状态。他们的增长数据不好，通胀率低于预期。所以根据这种逻辑，欧洲央行似乎不应再加息了。这就是市场一直以来期待的情况。我们可以通过观察短期利率期货来了解这一点。而这一周，我们似乎终于获得证实这确实是情况的消息。欧洲央行高级官员、表现出色的伊莎贝尔·尚纳布尔（Isabelle Chnable）在上周接受路透社采访时，她开场引用了凯恩斯的名言，即当事实改变时，我会改变我的想法，这就是我们应该如此行事的方式。

Now, seems like she is looking at the data and inflation data has been coming in softer than expected. That means progress on inflation has been better than expected. The implication, of course, is that the ECB most probably is done with its rate hike cycle. And so now the focus has to be when are they going to cut rates? Now, the market has been pricing and rate cuts sometime several months away. After this interview, they're pricing a slightly more dovish path of policy. But that definitely is the focus now. And you can see that being reflected in market pricing. It's obviously, let's look at the Euro-USD exchange rate. Over the past few days, you can see that the Euro seems to be losing momentum and seems to be weakening against the dollar. The market price in aggressive fed cuts. And now it's beginning to price in some ECB cuts and these two are having some out of a balancing impact.

现在，看起来她正在观察数据，而通胀数据则比预期软弱。这意味着通胀进展比预期要好。当然，这就暗示着欧洲央行很可能已经结束了其加息周期。所以现在焦点必须是他们何时降息？现在市场预计降息可能在几个月后进行。在这次访谈之后，市场预计的政策轨迹稍微更为温和。但这绝对是目前的重点。你可以看到市场定价的反映。很明显，让我们看看欧元兑美元汇率。在过去的几天里，你可以看到欧元似乎失去了势头，并对美元走软。市场正在预期美联储将大幅削减利率。现在它开始预计欧洲央行也将进行一些降息，这两者正在产生一些平衡的影响。

But that's not the only place we can look to see the impact of anticipated rate cuts. We can also look in Eurozone risk assets. For example, the DAX, which is the German stock market index or the CAAC, the French stock market index. When you look at these indexes, it looks like they are going to the moon. After all, it looks like we are embarking upon a rate cutting cycle across the world. And rate cuts are something that risk assets like. From my observation, the biggest driver of financial assets is central bank policy. So if the central banks across the world are signaling rate cuts, then that's obviously positive for risk assets abroad as it is in the US. But actually, not all central banks are actually in on the rate cut bandwagon, which brings us to our last topic.

但这并不是我们唯一可以看到预期降息影响的地方。我们还可以看欧元区的风险资产。例如，德国股市指数DAX或法国股市指数CAAC。当你看这些指数时，感觉它们像是要飞上天。毕竟，看起来我们正在全球进入降息周期。而降息是风险资产喜欢的。从我的观察来看，金融资产的最主要推动因素是中央银行的政策。所以如果全球中央银行正在暗示降息，那显然对海外的风险资产是积极的，就像在美国一样。但实际上，并不是所有的中央银行都在降息的队列中，这就带我们来到了我们的最后一个话题。

The Bank of Japan is actually thinking about going in the opposite direction. This reporting suggests based on a recent interview from Governor Weta that he's thinking of hiking rates in the near future.

日本银行实际上正在考虑朝着相反的方向发展。最近一次由维塔行长进行的访谈表明，他正在考虑在不久的将来提高利率。

Now just for some perspective here, over the past couple of years, the Federal Reserve hike rates aggressively, hike comfortably above 5%. At the same time though, the Bank of Japan still comfortably negative. So the inflation washed over the entire world, including in Japan and inflation in Japan has been comfortably above the BOJ's target for some time, but they have kept interest rates negative.

现在让我们来谈谈一些背景信息：在过去几年里，美联储大幅提高了利率，利率甚至舒适地超过了5%。与此同时，日本银行的利率依然保持在负值。因此，通胀席卷了整个世界，包括日本在内，而日本的通胀率已经舒适地超过了日本银行的目标一段时间，但他们依然保持利率为负值。

Now the market has been anticipating based on swaps that the Bank of Japan is going to be lifting their interest rates. So sometime next year. And this recent interview seems to have strengthened that expectations. And we can see that reflected immediately in market pricing.

现在市场已经根据互换合约预期日本银行将会提高利率。预计将会在明年的某个时候实施。最近的采访似乎加强了这种预期。我们可以立即在市场定价中看到这种变化。

So if you look at the USDJPY, the exchange rate between dollars and yen, you can see that the release of the news resulted in a discrete 2% appreciation of the Japanese yen. And of course, if you look at the Japanese bond market, 10-year JGBs rose significantly at that news. So that makes total sense, of course, right? When the Bank of Japan is thinking of hiking rates, well, you got a price that means the yen is going to strengthen. And then of course, that means that yields go higher, not rocket science.

所以，如果您看一下美元兑日元的汇率（USDJPY），您会发现新闻发布导致了日元离散升值了2%。当然，如果您再看一下日本债券市场，您会发现该消息使得10年期日本国债（JGBs）大幅上涨。这是合情合理的，不是吗？当日本银行考虑加息时，意味着日元将会加强，并且这意味着收益率会上升，这并不是什么高深的知识。

But of course, many market participants have been paying particular attention to this because it's commonly thought of as a major funding currency. So there's a couple of ways you can think about this.

当然，许多市场参与者一直特别关注这一点，因为它通常被视为主要的资金货币。所以你可以从几个方面来考虑这个问题。

So if you are a giant foreign investor and you're investing all over the world, let's say you want to borrow money. Where should you borrow money? Well, across the world, in Japan rates are negative. So it makes sense to borrow a lot of money from Japan, convert that to dollars or euros or wherever you want to invest, and then use that to buy non-yen demonaminated assets.

所以，如果你是一位庞大的外国投资者，并且在世界各地进行投资，假设你想借钱，你应该从哪里借钱呢？嗯，在世界范围内，日本的利率是负值。因此，从日本借入大量资金，将其转换为美元、欧元或其他你想要投资的货币，然后用这些资金购买非日元标价的资产，这是有意义的。

You can also say the same thing about Japanese investors. Let's say you are a giant Japanese insurance fund. You have a whole bunch of yen you need to invest, but you don't want to have negative rates and you don't like to have super low rates. Instead, then you take that money, you convert it into dollars and maybe buy treasuries or agency MBS.

你也可以用同样的方式来描述日本投资者。假设你是一家庞大的日本保险基金。你手头有大量的日元需要投资，但你不希望遇到负利率，也不喜欢非常低的利率。所以，你将这些资金转换成美元，可能购买国债或机构抵押贷款支持证券（Agency MBS）。

So if the yen is a major funding currency for assets for investors across the world, when the Bank of Japan raises interest rates, that could potentially be destabilizing. It could be destabilizing. One is that, well, maybe interest rates go higher in Japan. Maybe my trade doesn't work anymore, and so I sell my foreign assets to repay my yen loans, one source of instability.

因此，如果日元是全球投资者资产的主要融资货币，当日本银行提高利率时，可能会引发不稳定。这可能会导致不稳定。其中一个原因可能是日本的利率可能会上升。也许我的交易不再有效，因此我会出售我的外国资产以偿还日元贷款，这是不稳定的一个来源。

Another source is that as interest rates in Japan rise, maybe the Japanese yen appreciates a lot, and so I'm sitting on a lot of foreign currency losses. So, for example, let's say it's widely reported that Japanese life insurers have been buying foreign assets on an unhedged basis. So let's say your Japanese life insurer, let's say you bought a billion dollars worth of US treasuries. Now you did not hedge the currency risk, and so you basically took a lot of yen and sold it, bought dollars, and bought treasuries.

另一个来源是，随着日本的利率上升，日元可能会大幅升值，因此我遭受了大量外币损失。举个例子，假设广泛报道称日本人寿保险公司一直以未对冲的方式购买外国资产。假设你是一家日本人寿保险公司，你购买了十亿美元的美国国债。现在你没有对冲货币风险，所以基本上你抛售了大量日元，购买了美元和国债。

Now over the past two years, this trade has been killer because you've been getting higher interest rates on treasuries, but at the same time, the dollar has appreciated against the yen significantly, so you've made money on the currency side. However, if the Bank of Japan is raising interest rates, maybe the yen strengthens and you end up losing on the currency side. And you did, because of course you didn't hedge your currency exposure, and based on Bank of Japan data, indeed, it seems like fewer people are hedging their currency exposure.

在过去的两年里，这种交易一直很赚钱，因为你可以在国债上获得更高的利率，同时美元对日元也大幅升值，所以你从货币的一面赚了钱。然而，如果日本银行加息，也许日元会变强，你就可能在货币交易上亏钱。然而，由于你没有对你的货币风险进行套期保值，因此你确实亏了钱，根据日本银行的数据，似乎确实有更少的人对其货币风险进行套期保值。

So, maybe because you're losing money on the currency side of your trade, you get out of, you get out of a trade, so you sell the treasuries, sell the agency and BS or corporate bonds or whatever it is you're holding, and you repay your yen loan. So there is a possibility that increases in the Bank of Japan's policy rate, could, through higher interest rates in the stronger yen, have some deleveraging impact on asset markets abroad.

所以，可能是因为你在货币交易方面亏损，你退出交易，所以你卖掉国债、机构和企业债券，或者你持有的其他资产，然后偿还你的日元贷款。因此，日本银行政策利率的提高有可能通过日元升值导致的较高利率，在海外资产市场上产生一定的去杠杆化影响。

So far though, of course, you don't see it, and indeed, I think it's important to note that although the Bank of Japan is hiking interest rates, they're probably going to go from negative 0.1% to 0%. The interest rate difference show between the yen and the dollar and the euro, and other currencies remains very large. So I would expect that the Bank of Japan to be moving very cautiously and to do this in a way that's not going to be destabilizing. They will, for certain, be in close contact with other central banks. So I think so far that this is something that is well understood and it will be managed carefully. The Bank of Japan has shown that they are able to do this. Remember, they gradually lifted the Yoda control curve band and, you know, things seem to be, have been working well. So that's, I'm not too worried about this.

迄今为止，虽然你没有看到，但实际上，我认为重要的是要注意，尽管日本银行正在加息，但他们可能只会从负0.1%调整到0%。日元与美元、欧元和其他货币之间的利率差距仍然非常大。因此，我预计日本银行会非常谨慎地进行行动，并且不会引发动荡。他们肯定会与其他央行保持密切联系。迄今为止，我认为这一点是被充分理解的，并且将会得到谨慎处理。日本银行已经表明他们有能力做到这一点。请记住，他们逐步提高了货币政策控制曲线的范围，而且事情似乎进展顺利。所以我对此并不太担心。

Okay, so this week we have a Fed meeting. So I will be back after the Fed being to give you my thoughts. My base case is that this is going to be interpreted as a dovish meeting. It's not going to be as dovish. It's priced into the interest rate futures markets, but I think that the equity market would interpret it as dovish. So that's my expectation.

好的，所以这个星期我们有一场美联储会议。所以会议结束后，我会回来给你们我的想法。我的基本预期是这次会议会被解读为鸽派。虽然市场已经将此纳入了利率期货市场的定价，但我认为股票市场会将其解读为鸽派。所以这是我的预期。

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