Post

In the era of "stubborn washes," we need to refocus on the data. Tonight's combined data—GDP, PCE, personal consumption—what results will the market expect? 1. The Wash's policy proposals: a 2% inflation target, cautious rate cuts, cautious use of monetary policy, weakening the June CPI, and even in my opinion, weakening all current market data unfavorable to his policies 2. Therefore, from this perspective, we cannot only look at PCE; tonight's data should be considered comprehensively. Data weighting should first be based on the structure of GDP data, then personal consumption, and only then PCE data. The core of supporting Wash's high interest rate policy is to assess whether the economy is resilient enough 3. GDP was actually 1.5%, nominally slightly weak, but real consumption in subcategories remained strong, with consumption exceeding expectations. This means household demand has not collapsed and the economy remains resilient, which provides some basic reason for Wash's continued high interest rates 4. Core PCE: The core PCE annual rate met expectations and was slightly below the previous value, but the monthly rate dropped sharply below market expectations, meaning short-term inflation concerns have eased. However, medium- to long-term inflation concerns remain, and inflation remains sticky. To ease inflation concerns, continuous weakening data is needed 5. Overall, tonight's data shows the economy remains resilient, consumption supports the economy, inflation remains sticky, and short-term inflation weakening lacks sufficient evidence to change interest rate policy. Combined with Wash's policy, this data has eased inflation concerns and high interest rate expectations. However, whether it can ease the September rate hike remains a significant challenge 6. Looking at market performance, a weak dollar and strong gold mean concerns about high interest rates or rate hikes are easing. However, the 1-year U.S. Treasury yield remains high, and the market has not yet returned to expectations for rate cuts. The 1-year yield has fallen, the yield on 10- and 30-year medium- and long-term bonds has declined, rate hike expectations have weakened, short-term inflation worries have all weakened, and long-term inflation expectations have all weakened. However, tonight's data is clearly more favorable for easing short-term inflation concerns, with the 10-year yield falling noticeably faster than the 30-year yield. The VIX index declined, the SPHB/SPHQ ratio rebounded, and the US stock index rebounded. Short-term risk appetite increased, interest rate concerns were raised, and the recovery after the US stock decline + positive earnings reports led to a rebound. Tonight's data is generally positive, but this positive factor is still limited. It cannot completely reverse the situation and bring rate cut expectations back. Coupled with Walsh's persistent distrust of the current data, this has invisibly weakened the positive effects of the data. This week, the key is still to watch the earnings report. Macro data and geopolitical issues are weaker than the fundamentals of the reports! #美联储三票主张加息, tonight's PCE is a new highlight