In the past week, the overseas market was strongly repaired after the previous double blow of "Omicron virus + fed Eagle release". The three major indexes of US stocks rose 3.6% - 4.0% and the international oil price rose 8% throughout the week. More information shows that the symptoms of people infected with Omicron virus are not serious, while the U.S. inflation data did not exceed expectations, and the market also has psychological construction for the Federal Reserve to speed up taper and other actions. We have previously suggested that Omicron virus disturbance needs to be viewed objectively because virus transmission and mortality are usually inversely correlated; Although the Fed's "Hawking" surprised the market, it is not a bad thing. However, the optimism of the market in the recent week is inevitably excessive, because the conclusive data of the mutated virus are not available, and the monetary policy guidance of the Federal Reserve will continue to face challenges in the coming months. With more information on the epidemic and the landing of the Federal Reserve's interest rate resolution in December, the market may have a clearer direction.
Overseas economic tracking: 1) overseas epidemic: the growth rate of confirmed cases of covid-19 in the world has unexpectedly decreased slightly in recent week, mainly because many countries have temporarily strengthened economic blockade and border control. The epidemic situation in the United States, Germany, Russia, Singapore, Vietnam and other regions has been controlled. On December 8, who said that 57 countries around the world had reported Omicron cases. As of December 10, Omicron cases had been found in 25 states in the United States. Public concerns about Omicron mutant virus have been significantly alleviated. On December 7, fudge, the chief medical adviser of the White House, said that preliminary evidence showed that Omicron may be more contagious, but the symptoms may not be so serious. 2) US economy: US CPI in November was 6.8% year-on-year and month on month (0.8%) reached a new high, and each sub item basically continued the trend in October, reflecting that the pressure on energy prices and supply chain bottlenecks in the United States have not been significantly alleviated. However, the market's concern about inflation has not continued to ferment. The implied inflation expectation of tips in the five years has not increased but decreased, and the inflation expectation of consumers at the University of Michigan is flat as last month. Although inflation is still rising, the University of Michigan in the United States has decreased The initial value of consumer confidence rebounded slightly to 70.4. The demand for employment in the United States remained strong. The number of job vacancies continued to rise in October, while the turnover rate decreased. The number of new jobless claims fell to 184000. It is difficult to "achieve overnight" the recovery of employment in the United States in the coming months, and there is still room for wages to rise.
Global Asset Performance: stock markets, global stock markets generally rose, US stocks led the world, and the S & P 500 index rose 3.8% throughout the week, which has basically wiped out the impact of this round. In the bond market, the yield of most term US bonds rose, and the yield of 10-year US bonds rose 13bp to 1.48% throughout the week, Including actual interest rate (10-year tips interest rate) rose by 12bp. Since December, the short-term treasury bond yields of the United States, Canada and Germany have still risen, while the short-term interest rates of the United Kingdom and Australia have been flat. For commodities, the CRB index rose by 2.4% throughout the week. WTI and Brent crude oil closed at US $71.7 and US $75.2 / barrel respectively, rebounding by about 8% throughout the week. We think the current oil price level is more reasonable. LME copper inventory has fallen to the lowest level in recent two years Low level, prices may have room to rise. In foreign exchange, the US dollar index mainly maintained a narrow fluctuation and closed at 96.05 on December 10. The Australian dollar, Canadian dollar and New Zealand dollar appreciated against the US dollar, while the Japanese yen and Swiss Franc depreciated against the US dollar. After the US dollar index touched the resistance level of 96 points, the short-term correction pressure increased, especially considering: 1) the appreciation of the US dollar against the euro deviated significantly from the relative performance of the US and European Citigroup economic accident index; 2) The proportion of non-commercial bulls in ice US dollar index futures is at an all-time high, or contains adjustment risks.
Risk tips: the epidemic development exceeded expectations, US inflation exceeded expectations, and the Fed's policy exceeded expectations.
