U.S. retail sales growth exceeded expectations, and consumer demand for all kinds of goods was generally strong. Overall, the year-on-year retail sales of the United States have been strengthened since bottoming out in April 2023 until December, exceeding market expectations for many times, and showing a pattern of general improvement in the retail sales of various goods, indicating that the consumption willingness of American residents has not been substantially affected by the current round of the Federal Reserve's monetary tightening cycle, which has lasted for nearly two years, and the strong consumer demand of residents may continue to constitute an important foundation for the stable growth of the U.S. economy, that is, a "soft landing" or even a "no landing".
The probability of the Fed cutting interest rates in March has decreased, and gold prices have adjusted at a high level. London spot gold fell 029% to 2056$35 an ounce, SHFE gold rose 013% to 48204 yuan. The minutes of this week's Fed meeting showed that further rate hikes may be appropriate, and the market widely believes that this is the Fed's extreme correction of the market's expectations. According to CME Group's FedWatch tool, the probability of a Fed rate cut in March 2024 has increased from 73 last week4% to 623%, the probability of interest rate cuts is reduced, gold prices are adjusted at a high level, and the bull and bear riders believe that the Fed will enter a cycle of interest rate cuts in 2024, and gold prices are expected to continue to rise.
The strong consumer demand of US residents may produce two different results on the production side: one is that the import of consumer goods grows simultaneously, the US ** deficit expands, domestic production is not stimulated, and the exports and economic growth of consumer goods exporting countries improve; Another situation is to transmit to the supply side of the United States itself, the domestic economic growth of the United States is stronger, and the deficit tends to narrow.
Under the phased role of the increasingly obvious "anti-globalization" policy orientation of the United States, the current supply side of the United States is increasingly showing the characteristics of the second situation. The latest data comes from the stronger-than-expected growth in U.S. industrial production and manufacturing production, especially advanced manufacturing production represented by semiconductor electronics, in December.
The Federal Reserve released the minutes of the December FOMC meeting, the minutes did not give a specific path for interest rate cuts, and the non-farm payrolls data exceeded expectations, and the market expectation of interest rate cuts once cooled, putting pressure on the overall base metal**, but the ISM manufacturing PMI in the United States in December still has some resilience and forms a certain support for the base metal**. The Fed also further clarified in the minutes that the policy rate may have peaked, the risk of inflation has declined, and it is implied that the interest rate hike is over, and it is appropriate to cut interest rates in 2024.
The number of new non-farm payrolls in the United States in December was 2160,000, higher than the market expectation of 170,000, and the unemployment rate continued to remain at 37%；And the U.S. non-farm hourly earnings marginally accelerated, with a year-on-year increase of 410%, an increase of 044%。The strong non-farm payrolls data in the United States in December, coupled with the fact that the minutes of the Federal Reserve's December monetary policy meeting did not give a clearer message on interest rate cuts, made the market expect more optimistic interest rate cuts, resulting in some recent results.
At present, the CME federal interest rate** also shows that the market's expectations for the first interest rate cut in March have not changed, and the uncertainty of the US economic outlook in 2024, as well as the certainty logic of the Federal Reserve's high probability of multiple interest rate cuts, which drives gold prices**, has not changed. The resilience of the recent U.S. labor force data and the Red Sea crisis that led to the emergence of commodities such as energy may revise gold prices, which previously contained expectations of extremely aggressive interest rate cuts, putting stocks in a better position to allocate again.
The Federal Reserve's December interest rate meeting continued to pause interest rate hikes, Powell performed**, and the market expects the Fed to cut interest rates three times in 2024, totaling 75 basis points, **US dollar index**. Bloomberg expects the Fed to cut rates by 125 basis points in 2024, starting in March. The year-on-year growth rates of the US CPI, core CPI and PPI in November were basically in line with market expectations. Riding the bull and the bear believes that affected by the complex and changeable international situation, the continuous purchase of gold by global central banks, geopolitical conflicts, the expected increase in stagflation in Europe and the United States, and the expectation of default on U.S. bonds, we can continue to pay attention to the investment opportunities of the world.