Overnight, the spot **strong**, the highest intraday touched 2027$36, the lowest touched 1972$78 and finally closed at 2027$36. In today's European session, ** extended its rally and is currently hovering around $2,036.
The Fed capitulated!
Overnight, the Fed capitulated to the market and compromised.
At 3 a.m. Beijing time on December 14, the Federal Reserve announced that it would target the federal interest rateMaintained at 525%-5.5% unchanged, in line with market expectations.
The latest "dot plot" shows that the current rate hike cycle has been completed, and the Fed** has a median expectation of 4 for the policy rate in 20246%，It is implied that interest rates will be cut by 75 basis points next year, and the estimate is 25 basis points per rate cut, which is equivalent to three rate cuts next year。At the same time, the Fed lowered its interest rate forecast for the end of 2023 to a level consistent with current rates, which is the strongest signal signaling the end of the rate hike cycle.
Specifically, the Federal Reserve raised its GDP growth forecast for this year, slightly lowered its economic growth forecast for next year, the unemployment rate is expected to remain unchanged for the next three years, and lowered the PCE and core PCE inflation expectations for the next three years, of which this year's expectations have been lowered by 50 basis pointsInflation is still expected to fall back to the Fed's target of 2% in 2026
The market has every reason to believe that the current rate hike cycle is completely over.
To be honest, the pause in rate hikes has not allowed the market to get excited, and what really surprised the market was Powell's statement.
You must know that Powell's consistent style is to "be hard-mouthed" and never compromise with the market. But this time, Powell not only softened his hands, but also began to soften his mouth, and directly and rarely made a clear statement to the market. He said,Inflation is slowing without a surge in the unemployment rate is good news, interest rate cuts are starting to come into view, and policymakers are pondering and discussing when to cut rates
Powell's statement on the rate cut is definitely historicIt means that the Fed has begun to surrender to the market
Affected by this, the U.S. market was completely carnival, the three major index indexes soared in a straight line, and the Dow Jones index rose by more than 570 points intradayIt hit an all-time high, standing above 37,000 points for the first time；The Nasdaq and S&P 500 both hit new highs since the beginning of 2022. As of **, the Dow rose 14%, the Nasdaq rose 138%, and the S&P 500 rose 137%。
The offshore yuan rose nearly 600 basis points against the dollar to 71365。U.S. Treasury yields fell across the board, with the U.S. 10-year Treasury yield falling to its lowest since August, the latest **125 basis points at 408%；The U.S. 2-year Treasury yield fell to its lowest level since mid-June, with the latest plunge of 196 basis points at 4537%。
Currently,The market is pricing in a 72% chance of a rate cut in March, up from 49% earlier on Wednesday, and a 94% chance of a rate cut in May is expected. In addition, the Fed's interest rate cut for next year is still smaller than the market's expectations, with the Fed believing a 75 basis point cut next year and the market pricing a 125 basis point cut next year.
It is worth mentioning that after the Fed's pivot, Wall Street began to frantically "sweep goods".
With the end of the Fed's rate hike cycle, more and more Wall Street capital is betting on a sharp recovery in US Treasuries**.
Last Friday, the triple long U.S. Treasury ETF owned by the company Direxion ——TMF gets 2$0.5 billion in net inflows, setting a record for the highest net inflows in a single day
The market's frenzied pursuit of U.S. Treasuries is also reflected in the U.S. Treasury issuance market this week.
In the early morning of December 13, the U.S. Treasury Department completed a $21 billion U.S. Treasury bond issuance and raised funds, with a winning interest rate of 4344%, a sharp drop of 42 from the winning interest rate of U.S. bonds in the same period in November5 basis points and 4 below the pre-issuance rate347%。
Behind this,It was more and more capital that began to rush to buy US Treasury bonds-- The bidding multiple of the U.S. Treasury bond auction reached 243, the highest level since September and also higher than the average of the last six times 240 times.
At present, the latest trading data of the U.S. interest rate swap market shows that more and more Wall Street investment institutionsTraders are betting that the Fed will pull the trigger for a rate cut as early as March next year
In addition to this, investors need to pay attention to the news on the international situation.
The House of Representatives launched a ** investigation into Biden!
On December 13, local time, Republicans in the U.S. House of Representatives voted to launch a formal investigation into Biden. The investigation will be aimed at, including whether Biden is taking advantage of the policyImproper benefits from foreign business dealings with his son Hunter Biden and other family membersand so on.
It was also reported that Biden earlier declined a request to testify behind closed doors. At the same time, the White House rejected the investigation, saying it was unfounded and politically motivated.
It is also worth mentioning that Ukraine is in big trouble.
Now, it can be said that Ukraine has reached its most difficult moment, in some ways, even more difficult than when the war first broke out.
On the most critical battlefield, the big ** launched by Ukraine actually failed, and now the Russian army is launching an offensive. The most test of war is logistics, UkraineThe money in Crane's pocket has basically been spent, but the aid from the United States and Europe has not come for a long time
So, Zelensky went to the United States again.
According to Biden's plan,The United States will allocate another $60 billion to Ukraine, but altogetherAnd party lawmakers strongly oppose it, the disappointed Zelensky left the United States.
Ukraine's challenges are much more than that.
You know, Ukraine's greatest hope is to join the European Union and NATO. But againencountered the obstacle of Hungary, but did not agree
In addition, the internal political situation in Ukraine is also in a violent turbulence, UkraineThe commander-in-chief of the army, Zaluzhny, has growing disagreements with Zelensky。Once elections are held in Ukraine, he is considered Zelensky's strongest contender.
Jintou.com: 1214th ** trend analysis
Yesterday I talked about some support positions below the ** in the circle, and the risk of falling to ** 1948 yesterday, but **did not go that way, pulled back after a new low during the day yesterday, and after Powell's speech today**.
* Yesterday was at a more important technical juncture, because ** is a weekly level trend, monthly level support pressure is more important, yesterday happened to be a monthly level of support**, plus Powell's unexpected speech, so ** explosive force is relatively strong.
Jintou.com.
From a technical point of view, the current trend is stronger, and the strength of the first is also large, and the 60-minute level here is directly pulled up after two steps horizontally, reaching the more important 2030-2050 pressure area above, and another important pressure position above is the neckline pressure around 2058. Therefore, if a significant top is to be formed, then a top pattern needs to be formed in the 2030-2060 area, or, weaker, around 2040.
Can a top be formed, thus breaking the upward trend of **?There is a chance. At present, the Fed's hole cards have been revealed, and today is the European Central Bank's interest rate meeting, waiting for the European Central Bank's interest rate meeting, and then leaving it to the market to make a choice. For trading, under the fluctuation of the weekly level, the intraday fluctuation will appear larger, and the range is also large, and it is not recommended to trade under uncertainty.
Disclaimer: The above information is for reference only and is not used as a basis for buying and selling!Investment is risky, and you need to be cautious when entering the market!