Markets Weekly April 6, 2024

Hello my friends, today is April 6th and this is Markets Weekly. So this week was a really volatile week in markets. We got some notable down days and some notable updates. Now taking a step back, it looks like we are moving out of the steady upward channel we've been in over the past few months. That suggests to me that we are in a period of consolidation slash correction. Now nothing goes up in a straight line. So personally, I think that the highs are not yet in for the year and I am looking to buy the dip. Let's see how that turns out over the coming weeks and months.

大家好，今天是4月6日，这里是本周市场。本周市场非常波动。我们经历了一些明显的下跌日和一些显著的更新。现在回过头来看，我们似乎正在走出过去几个月的稳步上涨通道。这让我觉得我们正处于整合/修正期。在市场中没有什么可以一帆风顺。因此，我个人认为今年的高点还没有达到，我将寻找买点。让我们看看未来几周和几个月会有什么样的变化。

So today I want to talk about three things. First, let's talk about gold. Now gold is absolutely surging and to some extent its little brother silver is doing well as well. Let's talk about what could be driving this sudden upward surge in prices. Secondly, this past week the treasury began on a very, very small scale. It's buyback operations. There seems to be a lot of interest in this and also a lot of confusion. Let me break down what's happening. And lastly, let's talk about how the market is actually out hawking the Fed right now.

今天我想谈论三件事。首先，让我们谈谈黄金。现在黄金价格绝对飙升，而它的小弟银也在表现不错。让我们谈谈是什么促使了这种突然的价格上涨。其次，上个星期，财政部开始了一项非常小规模的回购操作。对此似乎引起了很多兴趣，也有很多困惑。让我解释一下发生了什么。最后，让我们谈谈市场如何目前实际上在力挫联邦储备系统。

So over the past two years, the market has persistently priced in more rate cuts than the Fed has guided towards sometimes a lot more. But right now the market is actually pricing in fewer cuts than what the Fed is guiding. So let's talk about what could be causing that. Okay, starting with gold. Now let's look at a chart of gold prices. It looks like it's going straight up like a rocket ship, especially the past week where it looks like it's almost vertical. Looking at silver, which is also a precious metal, but also a part industrial model. It looks like silver is breaking out as well. Although to be clear, the chart is not as clean.

在过去的两年里，市场一直在定价比美联储所预示的更多的加息，有时甚至多得多。但是现在市场实际上正在定价比美联储所预示的更少的利率削减。那么让我们谈谈可能是什么原因造成了这种情况。好的，首先是黄金。现在让我们来看看黄金价格的图表。它看起来像一架火箭一样直线上升，尤其是过去一周看起来几乎是垂直的。再看看银，作为一种贵金属，但也是一部分工业模型。看起来银也在突围。尽管要明确的是，这图表并不是那么清晰。

Now gold is one of these interesting assets where there are many different perspectives on it. Let's go through a few of these to try to figure out what could be driving this upward surge. Now, if you are a traditional macro investor, you would look at gold through the lens of real interest rates and as a currency. The thinking being that let's say if real interest rates were negative, well, instead of having your money evaporate, let's buy something like gold, which is at the very least tangible. Now after the great financial crises, now real interest rates were negative and it seems like that was contributing to upward pressure on gold prices. But fast forward to today, if you look at real yields as proxied by five year tips, you can see that real yields are historically high at 1.9%. So it doesn't seem to be a driver for gold price action.

现在黄金是一种有趣的资产，人们对它有许多不同的看法。让我们来看看其中一些，试图弄清楚是什么推动了这次上升。现在，如果你是一名传统的宏观投资者，你会通过实际利率和货币的视角来看待黄金。想法是，假设实际利率为负，那么，与其让你的钱消失，不如买一些像黄金这样至少是有形的东西。在大规模金融危机之后，实际利率为负，似乎这导致了黄金价格的上涨压力。但快进到今天，如果你看看五年期国债通胀保护债券作为潜在指标的实际收益率，你会发现实际收益率在历史上处于高位，为1.9%。因此，看起来这并不是黄金价格走势的驱动因素。

Now some people think of gold as a currency, so that let's say when the dollar appreciates, then gold prices should go down and when the dollar depreciates, gold prices should go up. But if you look at a graph of the dollar index, you can see that the dollar has been very much range bound for the past few months. So that's not a driver. Another potential driver is the standard monetary policy. Now we all know the Fed is embarking upon a cutting cycle. But over the past week though, interest rates have gone up and if you are thinking about say more of a quantity of money kind of perspective, the Fed continues to steadily shrink its balance sheet through quantitative tightening. So it doesn't seem like that has been the big driver at least over the past couple weeks.

现在有些人把黄金看作一种货币，所以就好比说当美元升值时，黄金价格应该下跌，当美元贬值时，黄金价格应该上涨。但如果你看一下美元指数的图表，你会发现美元在过去几个月非常平稳。所以这并不是一个推动因素。另一个潜在的推动因素是标准货币政策。我们都知道美联储正在进行降息周期。但过去一周，利率却有所上升，如果你是从货币数量的角度来考虑的话，美联储继续通过量化收紧来稳步缩减其资产负债表。所以至少在过去几周内，这似乎不是主要推动因素。

People also note that there are a lot of foreign central banks buying gold and I think that's definitely true. Let's say if you are, let's say a big country with a lot of foreign reserves, obviously you want to diversify your foreign reserves, maybe out of the dollar, maybe into gold. But that seems to be something that's been happening in the background over the past few months and not something that's suddenly surged the past week. Now what seems to be the big driver in gold prices is geopolitical tensions. Now gold oftentimes also reacts to geopolitical tensions. Now this past week we had Israel bomb an Iranian embassy in Syria. Now bombing an embassy is definitely next level escalation and it seems like the market is reacting to this. If we look at oil prices, which are also of course sensitive to geopolitical developments in the Middle East, oil prices also seem to be moving upward as well.

人们还指出，有许多外国央行在购买黄金，我认为这绝对是真实的。比如说，如果你是一个外汇储备充足的大国，显然你希望将外汇储备进行多样化投资，可能从美元转向黄金。但这似乎是在过去几个月背景下发生的事情，并不是在过去一周突然激增的。现在，黄金价格的主要推动因素似乎是地缘政治紧张局势。黄金通常也会对地缘政治紧张局势做出反应。在过去一周，以色列轰炸了叙利亚的伊朗大使馆。轰炸大使馆绝对是升级的行为，市场似乎正在对此做出反应。如果我们看看石油价格，石油价格当然也受到中东地区地缘政治发展的影响，石油价格也似乎在上升。

Now when I look at say on a company perspective, oftentimes I see let's say a company has a earnings announcement and then the stock price has a big move. But when you look closely, oftentimes it seems like there's someone positioning in the opposite market before that announcement, that is to say someone knew what was happening. I imagine this is probably similar for governments. After all, if a government needs to do anything, there are thousands of people involved and someone always knows in advance. So what we could be seeing is just that over the past two weeks, there have been more and more people trying to position for what could be escalating geopolitical tensions. It's hard to say. Now one other thing to note is that going forward, the traditional flight to safety in geopolitical tensions may be different than it has been in the past because of what happened during the Russia-Ukraine war. Now during that war, the US and NATO of Western European countries froze the foreign reserves of Russia and right now are thinking about giving that money to the Ukrainian government. So I imagine that that's probably going to have messed with some of the traditional relationships we see that say flight to dollar, maybe flight to treasuries in time to geopolitical risk because there might be some foreign governments that are not willing to do that anymore. But we'll know more as time goes on. Any speaking, these geopolitical flare-ups are something that you should fade. I mean, look at what happened during the Russia-Ukraine conference, that spike in oil prices and so forth all faded down. But of course, if you fade too early, you could still end up with a lot of market-market losses even though eventually things blow over. So keep that in mind as well.

现在当我从公司的角度去看时，通常我看到比如说公司有盈利公告，然后股价有大幅波动。但仔细观察时，往往会发现在公告之前，有人在对立市场进行定位，也就是说有人知道会发生什么。我想这对政府也可能是类似的。毕竟，如果政府需要做什么，会有成千上万的人参与，总会有人事先知晓。所以我们现在可能看到的是在过去两周，越来越多的人试图为可能升级的地缘政治紧张局势做定位。很难说。现在需要注意的另一件事是，未来，由于俄罗斯与乌克兰战争期间发生的事情，传统的地缘政治紧张时期逃向安全资产的方式可能会有所不同。在那场战争期间，美国、北约以及西欧国家冻结了俄罗斯的外汇储备，现在考虑将这笔钱交给乌克兰政府。因此我想，这可能会干扰我们经常看到的传统关系，比如转向美元、也许转向国债以规避地缘政治风险，因为可能有一些外国政府不愿再这样做。但随着时间的推移，我们会了解更多。从经验来看，这些地缘政治升温往往会消退。我是说，看看俄罗斯与乌克兰会谈中发生的事情，油价飙升等等最终都会恢复。但当然，如果你太早就消退，即使最终事情会平息，你可能仍然会遭受很大的市场损失。所以也要记住这一点。

Okay, the second thing that I want to talk about is the Treasury buyback program, which began this past week. Now, it began very, very small scale, but I think there's some confusion as to what's actually going on. So let me talk about what's happening and then why the Treasury is doing this. So the Treasury buyback program is, as its name suggests, the Treasury is buying back its old debt. Now it's doing this for two reasons. First, to improve liquidity and the Treasury market and two, to better manage its own cash. Now let's talk about the second point first. So if you are the United States government, you have like any other business or any other individual inflows and outflows from your checking account. If you are the US government, the biggest inflows that you get every year are going to be tax related. Now, quarterly, you get tax payments from corporations, but every April, you get these huge surge of tax receipts from the general public. In the US, let's say individuals pay taxes on April 15th. So you can see basically every year, the Treasury's check-in account has this huge surge in mid-April when everyone goes and pays their taxes. Now, I mean, this is fine, but let's say that you're the Treasury and you suddenly have all this cash that you don't really know what to do with. One of the things that you could, to better deploy that cash is if you use that cash and to buy up some of your debt so that you would not have to pay interest expense. Basically saving the taxpayer some interest rate, interest expenditures. So this buyback program would allow the Treasury to have that flexibility. And a second thing that this buyback program would do is it would help improve liquidity in the Treasury market.

好的，我想谈一谈的第二个事情是财政部的回购计划，这个计划从上周开始。现在，它开始的规模非常小，但我觉得有些混淆关于实际发生的事情。所以让我谈一谈正在发生的事情，然后解释财政部为什么这样做。财政部的回购计划，顾名思义，就是财政部回购它的旧债务。现在它这样做有两个原因。第一，是为了提高财政市场的流动性，第二，是为了更好地管理自己的资金。现在先谈谈第二点。如果你是美国政府，你像所有其他企业或个人一样有进账和出账从你的支票账户。如果你是美国政府，每年你最大的进账会是来自纳税。现在，每季度从公司会得到税收，但每年四月，你会得到来自公众的巨额税收。在美国，个人在4月15日交税。所以你可以看到基本上每年，财政部的支票账户在4月中旬有巨额涌入现金当所有人去交税时。我是说，没问题，但假设你是财政部，忽然有了所有这些你真不知道怎么处理的现金。更好地运用这笔资金的一种方法是，用这笔现金购买一些债务，这样你就不必支付利息费用。基本上是节省纳税人的一些利率支出。所以这个回购计划会让财政部拥有这种灵活性。而这个回购计划另一件事是它会帮助提高财政市场的流动性。

So taking a step back, the Treasury market is a lot messier than the equity market. So let's say that you want to buy Apple stock or Microsoft stock. Well, there's just one ticker at MSFT and you know how to buy it. But the Treasury market is a lot messier because there are many, many, many different Treasury issues. Let's look at the 10-year Treasury, for example. Now, let's say today I issued a 10-year Treasury security. That security gets what's called a Q-SIP. A Q-SIP is like a ticker for the bond market. What happens is that US Treasury issues a new vintage of this 10-year Treasury security every three months. So right now I'll issue what let's say I'm the US government, I'm issuing a new 10-year Treasury security three months later. I'll issue a new one with a new Q-SIP and then three months after that, I'll issue a new Treasury security with a new Q-SIP then. So just one security can have many different Q-SIPs because again, it could recontenuse the issue debt.

所以，换个角度来看，国债市场比股票市场乱得多。假设你想购买苹果股票或微软股票。嗯，微软股票只有一个代码，你知道如何购买。但是国债市场要复杂得多，因为有许多许多不同的国债发行。例如，让我们看看10年期国债。假设今天我发行了一只10年期国债。那只债券会获得一个叫做Q-SIP的编号。Q-SIP就像是债券市场的代码。美国国债每三个月就会发行一种新的10年期国债。所以，现在我会发行一个新的，假设我是美国政府的话，之后的三个月，我会发行下一个带有不同Q-SIP的新10年期国债，然后在之后的三个月，我会发行带有另一个新Q-SIP的新国债。所以，仅有一个债券可能有许多不同的Q-SIP，因为它可能会再次发行债务。

In practice, liquidity in the Treasury market is concentrated on newly issued treasuries. We call these on the runs. So if you look at this chart here, you can notice that almost all the transaction volumes for certain tenor are concentrated in on the runs. So if you're an investor and you hold, let's say, a 10-year Treasury security that was issued a few months ago and you want to sell it, it might take longer than you want and you might not get the best price. Now one way to improve liquidity in the Treasury market is if there were fewer off the runs and more liquid on the runs. The US Treasury is hoping to do just that by let's say issuing an on the run US 10-year and using the proceeds to buy an off the run 10-year. The US Treasury is very clear that it's not aiming to change the maturity profile of its debt, it's just aiming to improve liquidity.

在实践中，国债市场的流动性主要集中在新发行的国债上。我们称这些为“on the runs”。因此，如果你看一下这张图表，你会注意到某个期限的几乎所有交易量都集中在“on the runs”上。因此，如果你是一名投资者，持有几个月前发行的一份10年期国债，并想出售它，可能会花费比您想要的更长的时间，并且可能无法获得最好的价格。现在，提高国债市场流动性的一种方法是减少“off the runs”数量，增加更具流动性的“on the runs”数量。美国财政部希望通过发行一份“on the run”美国10年期国债，并利用收益购买一份“off the run”10年期国债来实现这一目标。美国财政部非常明确地表示，它的目标不是改变债务的到期日配置，而是提高流动性。

Now when you look at the contours of this program, what you should notice is that it's not going to be very large. So again, it's just beginning but right now the US Treasury is guiding towards say $120 billion worth of cash management purchases and when it comes to Treasury liquidity purchases about $100 billion a year. So these are very small numbers in light of the ginormous Treasury market. But government programs always start like this. They start small and over time as the government becomes more comfortable with what it's doing, it could grow. So potentially in the future, this could be a much bigger force on market dynamics and maybe if we have some kind of emergency, this could also of course potentially be used to change the maturity structure of the Treasury's debt. Again, we're in the early phases of this program and it has potential to be much, much more than what the Treasury is staying right now. But we won't find out until an emergency happens.

现在当你看这个计划的轮廓时，你应该注意到它并不会很大。所以，现在美国财政部正在引导说，有大约1200亿美元的现金管理购买，以及每年大约1000亿美元的国库流动性购买。在庞大的国债市场中，这些数字非常小。但是政府计划总是从小开始的。它们开始很小，随着时间的推移，政府对自己正在做的事情更加自信，它可能会增长。所以在未来，这可能会对市场动态产生更大影响，也许如果发生了某种紧急情况，当然也有可能用它来改变国债的到期结构。再一次强调，我们还处在该计划的早期阶段，它有潜力远远超过财政部目前所说的。但直到发生紧急情况我们才能得知。

Okay, so the last thing that I want to talk about is how the market is actually more hawkish in the Fed right now. So based on the Fed's March dot plot, the Fed has been guiding towards three rate cuts this year. The market is right now is suggesting that, you know, maybe the Fed is just going to cut two and a half times this year. So the market is being a bit more hawkish in the Fed, which is surprising because recall, as recently as January, the markets were pricing in as many as seven cuts this year, even when the Fed guided towards three in December. So this is kind of a change in the markets reaction function. Now this change seems to be driven by better than expected data. So this past week, for example, we had the ISM manufacturing data print above 50 for the first time in several months. Now the way the surveys work is that when it's above 50, it suggests that the manufacturing sector is expanding. So it looks like we're at a turning point where manufacturing is getting better. Of course, the big data print we got was this past Friday, the nonform payrolls where perils show job creation of over 300,000 the past month, 300,000 was higher than all the estimates by Wall Street economists.

好的，我想谈论的最后一件事是市场对联邦储备局的态度实际上更加鹰派。根据联邦储备局3月的点阵图，联邦储备局今年一直在暗示会进行三次利率调整。而市场目前的看法是，联邦储备局今年可能会降息两次半。这表明市场对联邦储备局持更为鹰派的态度，这有些令人惊讶，因为回想一下，就在今年1月，尽管联邦储备局在去年12月暗示将进行三次利率调整，市场还是在今年全年预计会有多达七次的降息。这似乎是市场反应机制的一种变化。现在这种变化似乎是受到了好于预期的数据驱动。例如，上周我们的ISM制造业数据首次超过50，这是几个月来首次的情况。这类调查的工作原理是当数据超过50时，表示制造业部门正在扩张。看起来我们正处于制造业改善的转折点。当然，我们得到的重要数据中，上周五的非农就业人数数据显示上个月创造了30万以上的工作岗位，这高于华尔街经济学家的所有预估。

When you look at the details of this job report, continue to be quite positive. Again, in addition to the headline, we also had upward revisions for jobs over the past two months. We had the labor force participation rate tick up slightly. And of course wage growth continues to be fine. Now, there are some people on the internet commenting that a lot of the job growth was through part-time job growths. But again, Guy Burger here has a very good chart that breaks down that part-time job growth can be due to a couple of reasons. It could be for economic reasons or non-economic reasons. Now, if it's for economic reasons, maybe potentially signed for concern. But if you look at his chart, you can see that there really hasn't been that much of a pickup. People could have part-time jobs for non-economic reasons as well. Think about other people who are retired. Maybe they want to have something to occupy their time. Or maybe your housewife and you would like something to occupy your time as the kids are at school and so forth.

当你查看这份工作报告的细节时，要保持乐观。除了头条消息外，我们过去两个月的就业数据也有上调。劳动参与率略微上升。当然，工资增长也继续稳定。现在，有些人在网上评论说很多工作增长是通过兼职工作实现的。但是，Guy Burger在这里有一张非常好的图表，可以详细说明兼职工作增长可能有几个原因。这可能是出于经济原因，也可能是非经济原因。如果是出于经济原因，可能会引起关注。但是如果你看他的图表，你会发现实际上并没有太大的增长。人们也可能因为非经济原因而兼职工作。想想其他一些退休人士，也许他们想要有事情填补时间。或者你可能是一位家庭主妇，想要在孩子上学的时候有些事情填补时间。

So, you know, people do work for non-economic reasons. Again, the job data has been positive. And in addition to that, I think Chair Powell has actually been changing his tune in how he interprets labor market data in large part due to the tremendous amount of migration that we've had the past year. And that's what I'm going to be writing about in my blog this week and how this change in the Fed's reaction function suggests that the market may be misunderstanding what the Fed is thinking. Now, one other reason why the market may be pricing in a more hawkish Fed is that there are signs that maybe inflation might be picking back up. So again, we talked about how oil prices were elevated.

所以，你知道，人们会出于非经济原因而工作。再次，就就业数据而言，情况一直很积极。除此之外，我认为鲍威尔主席实际上已经在改变他对劳动力市场数据的解读方式，这很大程度上是由于我们过去一年出现了大量的迁移。这就是我本周将会在博客中写的内容，以及联邦储备局反应机制的改变表明市场可能误解了联邦储备局的想法。另一个市场可能认为美联储更加鹰派的原因是有迹象表明通胀可能再次上升。因此，我们又谈到了油价上涨的情况。

Well, that, of course, feeds into inflation. But if you look at other commodities like copper and aluminum, it seems like they seem to be moving up a bit as well. To be clear, iron ore and steel are in downtrends. So it's not an unequivocal picture. But if you look at, say, breaky events, so market measure of inflation, breaky events seem to be slowly edging upwards. Still, just 2.5%, nothing to worry about. But it seems like the market is becoming a little bit more concerned about inflation staying higher than expected. So it could be, due to all of this, looking at higher commodity prices, stronger than expected US growth, and lack of Fed GDP now projecting again, US GDP to expand at comfortably above 2% in this quarter that the market is beginning to be a bit more hawkish than the Fed. I suspect that is not the right reaction. But we'll see how things go over the coming months.

当然，这会导致通货膨胀。但如果你看看像铜和铝这样的其他商品，似乎它们也在稍微上涨。要明确一点，铁矿石和钢材正在下降趋势。所以这并不是一个绝对的图景。但如果你看看，比如breaky events，这是一个市场通胀指标，breaky events似乎在悄悄上升。不过，仅仅是2.5%，不用担心。但市场似乎越来越担心通货膨胀会维持在高于预期的水平。因此，可能是由于所有这些因素——更高的大宗商品价格、美国经济增长强于预期以及美联储再次缺乏GDP的预测，预计美国本季度的GDP将舒适地增长超过2%——市场开始比联邦储备委员会更加鹰派。我怀疑这不是正确的反应。但让我们看看接下来几个月会发生什么。

Again, thanks so much for your time. That's all I've prepared. And if you're interested in getting my latest thoughts, check out my blog at FEDDGUY.com. And if you're interested in learning more about markets, check out my courses at centralbanking101.com. Thanks so much. Talk to you all next week.

再次感谢你的时间。这就是我准备的全部内容。如果你对了解我的最新想法感兴趣，请查看我的博客FEDDGUY.com。如果你对更多了解市场感兴趣，请查看我的课程centralbanking101.com。非常感谢。下周再聊。