Northeast Securities: The FOMC meeting rekindled expectations of interest rate cuts and the golden cycle has arrived
2023-12-19 11:32:37
Zhitong Finance APP learned that Northeast Securities released a research report stating that the essence of the U.S. economic momentum and economic resilience stems from the misalignment of policy effects under loose fiscal + tight monetary policy. However, as U.S. residents’ excess savings continue to decline, and under the background of the Federal Reserve’s high interest rate environment, Tight money is gradually being transmitted to tight credit. The scissor gap between the effects of fiscal and monetary policies will become wider in the future. There will be more obvious downward pressure on the U.S. economy next year. The medium-term trend of gold prices is expected to remain upward. Related targets: Zijin Mining (601899.SH), Shandong Gold (600547.SH), etc.
▍The main views of Northeast Securities are as follows:
The dove voice at the December FOMC meeting was loud and clear, rekindling market expectations for interest rate cuts and driving gold prices to rise sharply.
The closing price of London gold this Friday was 2019.5 US dollars per ounce, a weekly increase of 0.8%. Looking at relevant data, the U.S. dollar index closed at 102.6 on Friday, a weekly decrease of -1.4%. The 10-year U.S. bond interest rate recorded 3.91% on Friday, a weekly decrease 32bp, the 10-year TIPS interest rate recorded 1.69%, a weekly decrease of 33bp.
1) The U.S. CPI data in December was generally in line with expectations.
12/12 The US CPI in November was 3.1% year-on-year, 3.1% expected, and the previous value was 3.2%. The core CPI was 4% year-on-year, 4% expected, and the previous value was 4%. Overall, the US inflation data was in line with expectations, showing a certain degree of stickiness. In terms of items, core commodity inflation is about 0% year-on-year, and is expected to remain low in the future; housing inflation is 6.5% year-on-year, lower than 6.7% in the previous month, and is expected to continue to technically decline due to statistical lag factors; core service inflation is differentiated. Among them, entertainment services inflation continued to fall from 5.7% to 4.8%, while medical care, transportation, education and communications rebounded slightly, echoing the structure of non-agricultural data in November. In the future, core service inflation is expected to decline overall, but resilience will always exist.
Under the influence of housing inflation, there is a high probability that U.S. inflation will continue its downward trend, but it will be difficult to maintain a “painless decline” forever. Considering that service inflation is still high and has strong resilience, it will still remain in the second half of the process when inflation eventually returns to 2%. It needs to be matched by weakening demand in the US economy.
2) The December FOMC meeting rekindled market expectations for interest rate cuts.
First, the target range for the federal funds rate remains unchanged at 5.25%-5.5%, in line with market expectations; second, the FOMC statement has adjusted its statement on the state of the economy, stating that the economy has slowed down and inflation has eased. , relatively dovish; third, Powell mentioned in the press conference that when to cut interest rates has become a consideration for Fed officials, and they do not need to wait until inflation drops to 2% before cutting interest rates; fourth, the December dot plot shows that 2024 The median policy interest rate forecast for 2020 is 4.6% (revised lower than the 5.1% in the September dot plot), implying a 75bp interest rate cut next year.
Due to strong market easing expectations, November non-farm payrolls slightly exceeding expectations and sticky inflation, the market generally expected the Fed to continue to act hawkishly to fight back. However, the result was that the FOMC meeting was much more dovish than expected, causing gold prices to rise sharply. rise.
3) How do you view the performance of gold prices after interest rate cut expectations are raised?
Simply trading the interest rate cut expectations brought about by this FOMC may have a limited role in promoting the rise of gold prices. If gold prices are to substantively break through the previous high and enter the main upward trend, they still need to be supported by the underlying logic of weakening subsequent economic data in the United States. , otherwise there will be a lack of further catalysis.
However, once the interest rate cut expectations are opened, it will reshape the market risk preference, that is, the market will be more sensitive to good news and more passive to bad news. As a result, the price of gold will enter a state where it is easy to rise but difficult to fall. Once there is a clearer economic situation in the future, If a weakening signal (such as non-farm payrolls is lower than expected) ignites market sentiment, gold prices may soon release upward elasticity.
risk warning:
U.S. inflation continues to exceed expectations, global monetary tightening exceeds expectations, and the dollar appreciates.
Warning from the financial community: The content, data and tools in this article do not constitute any investment advice and are for reference only and do not have any guiding role. The stock market is risky, so be cautious when investing!
2023-12-19 03:32:37
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