Markets Weekly May 4, 2024

Hello, my friends. Today is May 4th, and this is Markets Weekly. So this past week was another roller coaster weekend markets, but we did end the week up. And I continue to be positive on the equity markets. So let's see how that turns out. Today, I wanna talk about three things.

大家好，我的朋友们。今天是5月4日，这里是每周市场报道。上周市场经历了又一次过山车式的波动，但最终我们收盘上涨了。我对股市仍然持乐观态度。让我们拭目以待。今天，我想谈论三件事。

First, we have to talk about the big data point of the past week, the non-forms payroll report. But in addition to that, we also got a lot of other data on the labor market as well. So let's give an update as to what's going on in the US labor market.

首先，我们要谈一谈过去一周的重要数据点，即非农业就业报告。除此之外，我们还得到了许多关于劳动力市场的其他数据。所以让我们来更新一下美国劳动力市场的最新情况。

Secondly, this past week, we got the quarterly refunding announcement, which is when the Treasury tells the public how it's going to finance itself. Now the QRA was not market moving, but it's always interesting. So let's debrief what happened there.

其次，上周我们收到了季度退税公告，国库在这个时候告诉公众它将如何筹集资金。虽然季度退税公告并没有对市场产生影响，但它总是很有趣的。让我们来分析一下其中发生了什么。

And lastly, now we've talked about the yen a few times in the past, but it looks like finally, this time around, the Ministry of Finance put their money where their mouth is and actually intervened not once, but twice in the market this week. So let's see what happened. Alright, starting with employment data. So the big data point of the past week was the non-forms payroll print. Now we've gone over this a few times in the past. So as you guys all know, we got to look beyond the headlines. Now looking at the headline print though, starting there, the headline print was fewer jobs created than expected. So that was a disappointment. But looking deeper, it was how it continues to be a disappointment. Looking at average hourly earnings, again, lower than expected, and looking at the unemployment rate, again, higher than expected.

最后，我们之前已经多次谈论过日元，但这一次似乎最终，财政部付诸行动，本周在市场上实际干预了不止一次，而是两次。让我们来看看发生了什么。 好的，先从就业数据说起。过去一周最重要的数据点是非农就业数据。我们之前已经多次讨论过这个数据。大家都知道，我们得看看更深层次的内容。不过首先从头条数据说起，就业数据少于预期创造的工作岗位，这是令人失望的。但更深入之后，令人失望的地方还在继续。平均小时工资再次低于预期，而失业率也再次高于预期。

So all in all, it was a weak print following a series of stronger than expected prints. The market took one look at this and knew exactly what to do. Now the market priced in, more chances of fit cuts, and the equity market, of course, likes red cuts and so it went to the moon. The dollar also seemed to weaken a bit as well.

总的来说，这是一次在一系列强于预期的打印之后出现的疲弱打印。市场一眼就看出了这一点，知道该怎么做。现在市场已经定价了更多降息的可能性，股票市场当然喜欢红色的降息，所以股市飙升。美元也似乎有点走弱。

Now there are people thinking that, well, maybe this suggests that the economy is slowing. Maybe we go into a recession and that's bearish, but in my experience, red cuts are much more impactful when it comes to equity markets.

现在有人在思考，也许这意味着经济正在放缓。也许我们会陷入衰退，这是悲观的，但根据我的经验，降息对股票市场的影响更为深远。

Now in addition to the big non-forms payroll print, we also got some other labor market data as well. Now we got jolts, which tells you the amount of job openings available to in the US. The more the higher the jolts, that means there's more demand for labor because there's lots of job postings. Now over the past few years, jolts surged after the pandemic, but has steadily been moderating towards pre-pandemic levels. And we can see at a per-job-sicker basis, jolts is moderated a lot in approaching its pre-pandemic levels. So again, it seems like the labor market is softening.

现在除了大型非形式雇工工资打印之外，我们还得到了一些其他劳动力市场数据。现在我们得到了JOLTS数据，它告诉你美国的工作空缺数量。JOLTS数量越高，表示劳动力需求更大，因为有很多职位招聘。在过去几年里，疫情后JOLTS激增，但逐渐在向疫情前水平调整。我们可以看到，从每个工作岗位的角度来看，JOLTS已经大幅度调整并接近疫情前水平。因此，看起来劳动力市场正在变软。

Now one point, one other data point that I think the Fed has been focusing on a lot is wage growth. Now this past week, we got the employee compensation index, which is the Fed's favorite measure of wage growth because it takes into account things like benefits and the composition of the labor market. Now the ECI printed higher than expected.

现在有一个数据点，我认为联邦储备系统一直在关注的另一个数据点是工资增长。这周，我们得到了雇员薪酬指数，这是联邦储备系统最喜欢的工资增长衡量指标，因为它考虑了福利和劳动力市场的构成等因素。现在，雇员薪酬指数的数据高于预期。

Now usually you can think of this as inflationary because if you have to pay higher wages, maybe you turn around and you pass that through to higher consumer prices. But that alone though is not itself inflationary. For example, maybe wages are higher but productivity is also higher as well. Let's say I hire someone to work at a factory and I give them $100 an hour. Okay, let's say a year later, I paid the same person $200 an hour but they're actually making twice as much stuff as before. So per unit of production, it's actually not more expensive.

现在通常你可以把这看作是通货膨胀，因为如果你要支付更高的工资，也许你会转嫁给消费者更高的价格。但光是这样并不一定会导致通货膨胀。举个例子，也许工资涨了，但生产率也提高了。比如说我雇了个人在工厂工作，付他每小时100美元。好，再过一年，我给同一个人付每小时200美元，但是他们实际上比以前生产的东西多了一倍。所以每个单位的生产成本实际上并没有增加。

Now we also got productivity figures for the past quarter and they were disappointing. So all in all, we have higher wage growth, lower productivity, together it's an inflationary mixture. And that did lead to some reaction in the markets but ultimately it seems like the North Farm payroll sprint was the dominant force. Now if we continue to go forward with weaker employment data, I suspect that the market is going to price in more and more rate cuts and that's what I'm going to write about this week, how one path to get rate cuts, in a aside from slowing in fation would be through the Fed's mandate of full employment.

现在我们也得到了上一季度的生产率数据，而这些数据令人失望。总体来说，我们有更高的工资增长，更低的生产率，加在一起就是通货膨胀的混合。这导致市场上有一些反应，但最终似乎是北农场支付的工资为主导力量。现在，如果我们继续出现就业数据偏弱，我怀疑市场会越来越多地定价于降息，这就是我本周要写的内容，即除了通胀减缓之外，通过联邦储备的完全就业任务来实现降息的一个途径。

Okay, the second thing that I want to talk of this week is the quarterly refunding announcement. Now this QRA was not market moving and I don't think many people expected it to be. Now the last year, the past two quarterly refunding announcements were market moving because they surprised the market in their amount of expected debt issuance. So treasury markets interest rates like anything else based on losses supply and demand. When the treasury surprises the market by selling more debt than expected, again, higher supply means lower prices for treasuries, which means higher interest rates. And that's what we saw last year. But at the last quarterly refunding announcement, treasury very clearly telegraphs everyone that they're going to increase coupon sizes one more time, that is to say the past week and then going to hold sizes for the next several quarters. And so because the market already understood that coupon sizes would go up this QRA, but probably stay around this level for the next few quarters, it was not a surprise. And that's exactly what happened. At this latest QRA, the treasury again affirmed that it doesn't expect to increase coupon sizes for the next several quarters. So I would expect the QRA to be very uneventful for the next year. But the QRA does more than just announce to the public the financing plans of the treasury. Oftentimes they also include these interesting presentations based on topics of interest. So we get to see what the treasury is interested in. So there are two presentations this time. One of them was the introduction of a benchmark six week treasury bill.

好的，我这周想谈的第二件事是季度退款公告。这次的季度退款公告并没有引起市场动荡，我认为很多人也没有期望有这种情况发生。去年，过去两次季度退款公告引起了市场动荡，因为它们超出了市场对债务发行量的预期。国库市场的利率就像其他任何基于供求的市场一样。当国库出乎意料地出售比预期更多的债务时，供给增加意味着国债价格下跌，进而利率上升。这正是去年我们看到的情况。但在最近的季度退款公告中，国库非常明确地向大家传达了他们将再次增加票券规模的意图，即过去的一周将增加规模，然后在未来几个季度保持规模不变。因此，因市场已了解本次季度会提高票券规模，但未来几个季度可能会维持在这个水平，所以这并不是一个意外。而事实也确实如此。在最新的季度退款公告中，国库再次确认不会在未来几个季度增加票券规模。所以我预计未来一年季度退款公告将毫无波澜。但季度退款公告不仅仅是向公众公布国库的融资计划。通常它们还包括一些关于感兴趣话题的有趣演示。这样我们就可以看到国库对什么感兴趣。这次有两个演示。其中一个是引入一个标准的六周国库券。

So right now treasury bills come in standard sizes, four weeks, eight weeks, 13 weeks, half a year year and so forth. Right now treasury wants to introduce a new one, that's going to be six weeks and 10 or. Based on their research, that seems to be a sweet spot because money market funds would want to buy it. It does an impact their WAM, their weighted average maturity constraints too much. And six weeks seems to be about the length of time between fed meetings. So if you were buying a six week bill, you would have less concern that maybe the fed would certainly high grades or cut rates and this give you mark to market gains or losses. So in a sense, it would be less sensitive to fed meetings, meeting to meeting. So it looks like that's going to happen. And the second presentation was the treasury trying to brainstorm what additional treasury products they could put out.

目前国库券有标准尺寸，包括四周、八周、13周、半年等。现在国库正在考虑推出一种新的产品，为期六周或十周。根据他们的研究，这似乎是一个甜蜜点，因为货币市场基金愿意购买。这不会对他们的WAM（加权平均到期限）约束产生太大影响。六周似乎是联邦会议之间的时间间隔。如果您购买六周的国库券，您就不太担心联邦会议可能会升息或降息，这可能会给您带来按市值计算的盈亏。因此，在某种意义上，这将使其对联邦会议 less敏感，由会议到会议。看起来这将成为现实。第二个展示是国库在尝试想出什么其他国库产品他们可以推出。

Historically speaking, the treasury periodically goes into these brainstorming sessions and new products sometimes arise out of it. Looking at this chart, you can see that in the not too distant past, the treasury brainstormed about floating rate notes and indeed launched them shortly after. Now we have two year floating rate notes that are indexed through the three month treasury bill yield. Now, it seems like the two top ideas coming out of this brainstorm session is first, callable bonds and secondly, green bonds. A callable bond would simply be a bond that the treasury could buy back in case interest rates decline. It'd be like a mortgage, right? So if you have a mortgage in the US and then mortgage risk decline, you can refinance it at the lower rate. So a callable bond would be like that for the treasury. The interesting thing is that the treasury actually has issued callable bonds in the past. So if they did again in the future, it'd simply be a return to something they've already done before.

从历史角度来看，财政部定期进行这些头脑风暴会议，有时会推出新产品。看看这张图表，你会发现，在不太久的过去，财政部进行了有关浮动利率票据的头脑风暴，并确实在此之后不久推出了这种产品。现在，我们有了根据三个月国库券收益率指数的两年期浮动利率票据。现在，似乎从这次头脑风暴会议中出现的两个最好的想法是首先是可赎回债券，其次是绿色债券。可赎回债券简单地说，就是如果利率下降，财政部可以回购的债券。就像一个抵押贷款，对吧？所以如果你在美国有一个抵押贷款，当利率下降时，你可以以更低的利率进行再融资。所以，可赎回债券对于财政部来说就像这样。有趣的是，财政部过去实际上发行过可赎回债券。所以，如果他们将来再次发行，那只是回到他们之前已经做过的事情。

Now something totally new that they're also thinking about is maybe green bonds. Now, green bonds, as we all know, it's probably would depend a lot on who ends up in the White House, but green bonds have been more and more popular with investors due to the ESG craze. We even see many other foreign governments issue this. So maybe the treasury would take advantage of the craze and issue some green bonds. Again, this is completely a political decision that would depend on who's in the White House. Now, the last thing that I'll point out in the QRA is that you always want to look at the chart in particular. What this chart shows you is the expected fiscal deficit for the foreseeable future, as well as how much financing the treasury is getting if they keep coupon sizes constant. So as you can see, given the expected deficit and the current coupon sizes, treasury is going to be well financed for another year.

现在，他们也在考虑的全新事物可能是绿色债券。众所周知，绿色债券可能会在很大程度上取决于谁最终进入白宫，但由于ESG热潮，绿色债券在投资者中越来越受欢迎。我们甚至看到许多其他外国政府也发行这种债券。因此，财政部或许会利用这股热潮，发行一些绿色债券。再次强调，这完全是一个取决于谁掌权白宫的政治决定。现在，在QRA中我想指出的最后一点是，你总是要特别关注图表。这个图表向你展示了可预见未来的财政赤字，以及如果保持利息券规模不变，财政部将获得多少融资。因此，从预期赤字和当前利息券规模看，财政部将在未来一年内获得充分融资。

So that's why the treasury doesn't think it needs to increase coupon issuance. But beyond that though, based on the current expected deficit and the current coupon sizes, the treasury is going to have to increase coupon sizes again sometime next year. And when that happens, it's probably going to impact markets simply because markets are want to know just the size of the expected increase and where along the curve the increases come where increases in say the 30 year or other long radiated tenors will have bigger market impacts. But that's the next year. So for the first year, both future, I'd expect the QRA to be pretty boring or at least uneventful. Always interesting though.

所以这就是为什么财政部认为它不需要增加票据发行量的原因。但除此之外，基于当前预期赤字和当前票面大小，财政部将不得不在明年的某个时候再次增加票面大小。当这种情况发生时，它可能会影响市场，因为市场希望知道预期增加的规模以及增加在曲线的何处发生，增加30年期或其他长期期限将会产生更大的市场影响。但那是明年的事了。所以在第一年，我预计QRA会相当无聊，或者至少不会有什么波澜起伏。但总是有意思的。

Okay, the last thing that I want to talk about is the Ministry of Finance intervening in the currency market. So just to level sit a little bit, over the past year, more than a year, the yen has been depreciating significantly against the dollar. The driver of this depreciation is no secret. In Japan, they recently raised rates, but they raised from negative to zero. On the other hand, in the US, we've been increasing interest rates and interest rates are about 5.5%. So if you're an investor in Japan, obviously you want to move out of the yen and to dollars where you can get a high return for your cash. So that's been leading to a pretty strong depreciation in the yen. Now the authorities in Japan are aware of this and they are okay with a yen depreciation provided that happens in an orderly way. So over the past few weeks, the Ministry of Finance over there has been giving stern warnings trying to talk down speculators, telling them that they don't want the yen to continue to depreciate in such a rapid manner. That seemed to scare the speculators a little bit, but they immediately realized that the Ministry of Finance guy is all talking and not doing anything, and so they continue to push the trade.

好的，我想要谈论的最后一件事是财政部干预货币市场的问题。所以简单来说，过去一年多来，日元对美元已经明显贬值。这种贬值的驱动因素并不是秘密。在日本，他们最近将利率上调，但只是从负利率到零利率。另一方面，在美国，我们一直在提高利率，利率约为5.5%。因此，如果你是日本的投资者，显然你会想要将资金从日元转移到美元，以获得更高的回报。这已经导致了日元大幅贬值。现在日本当局意识到了这一点，并且他们认为只要贬值有秩序地进行，他们就可以接受。所以在过去几周，日本的财政部一直在发出严厉警告，试图打压投机者，告诉他们他们不希望日元继续以如此迅速的方式贬值。这似乎吓到了投机者们一点，但他们很快意识到财政部的人只是在说而不是在做任何事情，所以他们继续推动这种交易。

On Monday, we saw the USD JPI reach as high as 160 yen to the dollar, which is multi-decade highs. Now that 160 level seems to be the line in the sand for Japan, and the Ministry of Finance seems to have it intervened. In a short period of time, we saw that yen appreciate rapidly against the dollar. Now, many rumors, it seems like the market is coming to the consensus that the Ministry of Finance intervened. Now on Monday, that was also a holiday in Japan, so liquidity was thin. It would have been a very good time to intervene because when liquidity is thin, for a given amount of dollars, market price moves a lot more, so you get the most bang for your buck when you intervene when liquidity is low. But as you can see in this chart, as the yen appreciated rapidly, in the next two days, it began to depreciate again.

周一，我们看到美元对日元达到了1美元兑160日元的水平，这是几十年来的历史高点。现在，160日元似乎是日本的底线，财务省似乎已经进行了干预。在短时间内，我们看到日元迅速升值对美元。现在，有很多谣言，市场似乎达成共识，即财务省进行了干预。周一，日本也是假日，因此流动性较低。在流动性较低时进行干预是非常合适的，因为在流动性较低时，对于一定数量的美元，市场价格会有更大的波动，因此在流动性较低时进行干预可以获得最大的效果。但正如您在这张图表中所看到的，在日元迅速升值后，接下来的两天，它又开始贬值。

And so that seemed to prompt the second intervention from the Ministry of Finance on Wednesday after market close. Again, after market close, there's liquidity in the US session, and in Japan, they're all sleeping. Again, a good time for the Ministry of Finance to intervene. This time though, the yen strengthened a lot and seemed to stay strong for at least the next two sessions. Now, I don't know if it's going to remain strong. I suspect it won't, simply because the interest rate differentials are so large. But over the week though, the interest rate differentials did close a little bit. The FOMC meeting and non-form spiroprint led the markets to price in a little bit more chance of rate cuts this year. And so we can see that in the two year note yield, which declined notably this week. So that seems to be giving the yen some support.

因此，这似乎促使财政部在周三市场收盘后进行了第二次干预。同样，在市场收盘后，美国盘中有流动性，而在日本，他们都在睡觉。对财政部来说，再次干预是个好时机。不过，这次日元却大幅走强，并且似乎至少会在接下来的两个交易日保持强势。现在，我不确定它会保持强势。我怀疑不会，因为利率差异如此之大。不过，整个周内，利率差距确实在缩小一点。FOMC会议和非农人口数据使市场更多地定价了今年降息的可能性。因此，我们可以看到两年期国债收益率本周明显下降。因此，这似乎为日元提供了一些支撑。

In the future, if we continue to have week employment prints or if the markets continue to price in more rate cuts, I think that will continue to narrow with the interest rate differential and go a long way towards, I think, strengthening the yen much more so than any intervention can do. But let's see if that actually happens. Now, the market participants are speculating based on reports that the Bank of Japan, okay, so the Ministry of Finance along with the Bank of Japan probably spent about $160 billion worth to intervene. Now, one way they tried to piece this out, again, this is a lot of this speculation and we won't know more until more official data is released, is by looking at Fed weekly data.

在未来，如果我们继续出现就业数据疲弱的情况，或者市场继续定价更多的降息，我认为这将继续缩小利率差异，并在很大程度上加强日元，远远超过任何干预可能达到的效果。但让我们看看这是否真的会发生。现在，市场参与者根据报告推测日本银行，好吧，可能是日本财政部和日本银行共同出动了约1600亿美元来进行干预。现在，他们尝试一种方式来理清这些情况，再次强调这很大程度上是猜测，我们在更多官方数据发布之前将无法得知，这是通过查看美联储每周数据进行的。

So Japan being close friends with the US keeps a lot of its dollars at the Fed. Now, usually foreign central banks keep their dollars either in the form of treasuries held in custody at the Fed or in the foreign repo pool, where it's basically like an RFP for foreign central banks. They get a good return or as a unsecured deposits, basically like a checking account. What we see in the official data is there is a decline in the foreign repo pool followed by a rise in unsecured deposits that's subsequently unwound. So it looks like what happened is that the Ministry of Finance, again, they direct policy, Bank of Japan is probably where the person who actually keeps the money took money out of the foreign repo pool, put it in their checking account at the Fed and then withdrew it to intervene.

因此，日本与美国是亲密的朋友，会在美联储保留大量的美元。通常情况下，外国央行会将美元以美国国债的形式存放在美联储的托管中，或者放入外国回购池中，这基本上就像是外国央行的投标。他们会获得良好的回报，或者以无担保存款的形式，基本上就像是一个支票账户。从官方数据中我们可以看到外国回购池的下降，接着是无担保存款的上升，随后的逆向操作。所以，看起来发生的事情是，日本财务省，再次他们指导政策，日本银行可能是实际保管资金的地方，从外国回购池中提取资金，将其放入美联储的支票账户，然后进行干预。

But we'll know more as more official data comes out. So one last thing that I'll go over is that this is definitely not a currency crisis. I go over a number of examples of that in my course, Markets 101, but usually looking at say Thailand, for example, a currency crisis would happen if a country has a lot of foreign currency non-nominated debts and then their government is not able to support the currency. So in the late 1990s, a lot of Thai companies bought a lot of dollars and the Thai currency began to depreciate uncontrollably. Now the government at the time didn't have enough foreign reserves to protect their currency and so they had to let the currency go.

但随着更多官方数据的公布，我们会了解更多。所以我要再说一件事就是这绝对不是货币危机。我在我的课程《市场101》中涉及了很多例子，但通常来说，以泰国为例，如果一个国家有大量以外币非标记债务，而政府无法支持货币，那就会发生货币危机。在上世纪90年代末，很多泰国企业购买了大量美元，泰国货币开始无法控制地贬值。那时的政府没有足够的外汇储备来保护货币，所以他们不得不让货币贬值。

All these companies borrowed in dollars then saw their debt burden increase significantly. So there's a huge solvency crisis as well and that all ended very badly. In the case of Japan, now their government has tremendous amounts of foreign reserves. They can support the currency not indefinitely, but they can definitely provide a lot of support if they wanted to or at the end of the day, they could always adjust their industry policy. Now looking at the balance sheet of companies there, I'm sure there are companies there with dollar denominated debt, but also though, Japan has tremendous, tremendous amounts of foreign currency assets.

所有这些公司都借入了美元，然后看到他们的债务负担显著增加。因此，存在巨大的偿付能力危机，结果都非常糟糕。就日本而言，他们现在的政府拥有大量的外汇储备。他们可以支持货币不是无限期的，但如果他们愿意的话，他们肯定可以提供大量支持，或者说，他们总可以调整其产业政策。现在看看那里公司的资产负债表，我敢肯定那里有一些公司拥有以美元计价的债务，但另一方面，日本拥有大量的外币资产。

And Japan is a country that has a large current at cloud surplus. Every year Japanese companies are selling lots of stuff to the US, to other countries earning a lot of foreign currency and then reinvesting that in foreign currency assets. So they don't have any solvency concerns on account of a weaker yen.

日本是一个云出口顺差很高的国家。日本公司每年向美国和其他国家大量出口商品，赚取大量外汇，然后将这些外汇再投资于外国货币资产。因此，他们并不担心因日元贬值而导致的偿付能力问题。

The Ministry of Finance just doesn't like disorder and I'm sure many people in Japan are complaining about rising import costs as well. All right, so that's all I prepared for this week. Thanks so much for tuning in. If you're interested in my thoughts, check out my blog at thefedguy.com or if you're interested in learning more about markets, check out my online courses at centralbaking101.com.

财务部门只是不喜欢混乱，我相信日本有很多人也在抱怨进口成本的上涨。好了，这就是我这周准备的全部内容。非常感谢您的收听。如果您对我的想法感兴趣，请查看我的博客thefedguy.com，或者如果您想了解更多关于市场的知识，请查看我在centralbaking101.com上的在线课程。

Talk to you all next week.

下周再跟大家聊。