Macroeconomic Weekly Report: Market Expectations Game Continues, Economic Data Mixed

1. Macroeconomic Review of This Week

1. Market Overview

Market sentiment remains subdued this week. The S&P 500 index has broken below the 200-day moving average, triggering a sell-off from CTA strategies, but the selling wave is nearing its end. The VIX index remains above 20, and the put/call options ratio has risen, reflecting significant market panic.

The cryptocurrency market reacted lukewarmly to a politician's signing of a national strategic reserve for crypto assets. On one hand, the strategic reserve mainly consists of confiscated assets, with no mention of new purchases, which is below expectations; on the other hand, affected by the adjustment of major risk assets, the overall market liquidity is poor, and Bitcoin's rebound is weak.

2. Economic Data Analysis

In terms of manufacturing PMI, the new orders index has fallen below the threshold, and the employment index is below expectations, indicating that manufacturers are becoming cautious in production and hiring. The non-manufacturing PMI, on the other hand, exceeded expectations, suggesting that the service industry remains relatively robust, albeit transitioning from rapid expansion to slow growth.

In terms of GDP forecasts, a certain Federal Reserve has lowered its first-quarter GDP expectation to -2.4%. However, structurally, personal consumption expenditures and private investment have not declined; the lower GDP forecast is mainly driven by net exports.

Employment data shows a slight increase in the unemployment rate, a slowdown in job growth, and limited wage growth. Companies are more inclined to extend the working hours of existing employees rather than create new positions. Overall, the employment situation appears weak but has not yet deteriorated.

3. Monetary Policy and Liquidity

Key points from a central bank governor's speech:

• Tend to be cautiously optimistic before the trade policy becomes clear.
• Reaffirm the 2% inflation target; a short-term rise in inflation will not prompt an interest rate hike.
• Believes that the economic fundamentals remain stable, but the ongoing slowdown in employment may increase the likelihood of interest rate cuts.

In terms of liquidity, there has been a marginal improvement in the broad liquidity of a certain central bank, but market sentiment remains weak.

In the interest rate market, short-term financing rates have decreased, with the market betting on interest rate cuts in the next six months. The yield on 10-year government bonds has turned upward, indicating a easing of recession expectations.

2. Macroeconomic Outlook for Next Week

The market is still in the phase of expected speculation, and the trend is unclear. Institutional funds tend to be cautious, making it difficult to form a clear direction in the short term. It is recommended to pay attention to micro changes in economic data from March to April, manage positions well, maintain a balance between offense and defense, and wait for clearer trend signals.

Key data next week includes CPI, PPI, consumer confidence index, etc., which will help assess changes in inflation and consumption trends.