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October 6, 2024

This Week's Macroeconomic Preview: Fed Minutes, CPI Data, and Key Speeches

According to Jin10, multiple Federal Reserve officials are scheduled to deliver speeches in the coming week, and the Consumer Price Index (CPI) data may support slowing the pace of interest rate cuts. Investors will focus on the Federal Reserve's meeting minutes, U.S. September inflation data, and other key events. Here are the macroeconomic highlights that the market will closely watch in the new week (all times are in UTC+0):Wednesday, October 116:00 PM: The Federal Reserve releases its monetary policy meeting minutes.Thursday, October 1212:30 PM: Release of the U.S. September Consumer Price Index (CPI) year-over-year and month-over-month data.12:30 PM: Release of the U.S. Initial Jobless Claims for the week ending October 7.Friday, October 1312:30 PM: Release of the U.S. September Producer Price Index (PPI) year-over-year and month-over-month data.2:00 PM: Release of the preliminary University of Michigan Consumer Sentiment Index for October.

October 6, 2024

UAE Exempts Digital Asset Transfers and Conversions from VAT

According to Cointelegraph, the United Arab Emirates (UAE) has introduced amendments to its value-added tax (VAT) regulations, exempting transfers and conversions of digital assets, including cryptocurrencies. The UAE’s Federal Tax Authority (FTA) published these changes on October 2, with the new rules also covering VAT exemptions for managing investment funds and other virtual asset services. These exemptions will be applied retrospectively from January 1, 2018, as noted by business consultancy PwC.PwC explained that in the UAE, virtual assets are defined as representations of value that can be digitally traded or converted and used for investment purposes, excluding fiat currencies and financial securities. The auditing firm advised businesses dealing with virtual assets to review their retrospective VAT positions and pay special attention to input tax recovery. UAE-based bookkeeping and tax company Finanshels highlighted that input VAT recovery allows registered businesses to claim back VAT paid on eligible business purchases. PwC also mentioned that correcting historic returns might require voluntary disclosures from virtual asset companies.In addition to VAT exemptions, the UAE has been enhancing its regulations on virtual assets. On September 9, Dubai’s Virtual Asset Regulatory Authority (VARA) and the Securities and Commodities Authority (SCA), the UAE’s federal financial agency, agreed to mutually supervise virtual asset service providers (VASPs). This agreement allows VASPs operating in Dubai to acquire a license from VARA and service the wider UAE by being registered with the SCA by default. Furthermore, VARA has tightened its rules on crypto marketing. On September 26, the regulator mandated that firms promoting digital asset investments include a prominent disclaimer stating that virtual assets may lose their value in full or in part and are subject to extreme volatility.

October 5, 2024

Economists Weigh in on U.S. Employment Report and Fed's Inflation Battle

According to PANews, Allianz Chief Economist Mohamed El-Erian has issued a warning that not all investors are optimistic about the upcoming employment report set to be released on Friday. He emphasized that the Federal Reserve's fight against inflation is far from over. El-Erian noted that while the labor market appears robust on the surface, it is actually in a late-cycle phase, which could pose challenges ahead. Lindsey Bell, Chief Investment Strategist at 248 Ventures, echoed these concerns, stating that the wage growth reflected in the report might serve as a reminder to the Federal Reserve that inflation remains persistent. Bell's comments suggest that the Fed may need to remain vigilant in its efforts to control inflation despite a seemingly strong labor market. Meanwhile, Chicago Fed President Austan Goolsbee described the latest U.S. non-farm employment report as 'excellent' and expressed confidence that similar data in the future would bolster his belief that the economy is achieving full employment with low inflation. Goolsbee also indicated that it would be appropriate for the Federal Reserve to continue lowering interest rates over the next 12 to 18 months, aligning with the current expectations of most policymakers. This perspective highlights a cautious optimism among some Fed officials regarding the balance between employment and inflation. The mixed views among economists and Fed officials underscore the complexity of the current economic landscape, where strong employment figures coexist with ongoing inflationary pressures. As the Federal Reserve navigates these challenges, the upcoming employment report will be closely watched for further insights into the health of the U.S. economy and the potential direction of monetary policy.

October 5, 2024

Fed Officials' Speeches and Key Economic Data to Watch This Week

According to PANews, the upcoming week will see a flurry of activity from Federal Reserve officials, with numerous speeches and key economic data releases that could influence the pace of interest rate adjustments. Investors will be closely monitoring the Federal Reserve meeting minutes and U.S. inflation data for September. Here are the main macroeconomic events to watch this week:On Tuesday at 1:05 UTC+8, Neel Kashkari, the 2026 FOMC voting member and President of the Minneapolis Fed, will participate in a Q&A session at the Bank Holding Company Association's fall seminar. At 6:00 UTC+8, Raphael Bostic, the 2024 FOMC voting member and President of the Atlanta Fed, will deliver a speech. At 6:30 UTC+8, James Bullard, the 2025 FOMC voting member and President of the St. Louis Fed, will discuss the economic outlook and monetary policy. At 15:00 UTC+8, Fed Governor Michelle Bowman will speak at a European Central Bank event.On Wednesday at 0:45 UTC+8, Raphael Bostic will again address the economic outlook. At 4:00 UTC+8, Susan Collins, the 2025 FOMC voting member and President of the Boston Fed, will speak at a community banking conference. At 20:00 UTC+8, Bostic will deliver welcome remarks at another event. At 21:15 UTC+8, Lorie Logan, the 2026 FOMC voting member and President of the Dallas Fed, will discuss the current economic situation. At 22:30 UTC+8, Austan Goolsbee, the 2025 FOMC voting member and President of the Chicago Fed, will give opening remarks at the Chicago Payments Symposium.On Thursday at 0:15 UTC+8, Thomas Barkin, the 2024 FOMC voting member and President of the Richmond Fed, will speak. At 2:00 UTC+8, the Federal Reserve will release the minutes of its monetary policy meeting. At 5:00 UTC+8, Susan Collins will speak again. At 6:00 UTC+8, Mary Daly, the 2024 FOMC voting member and President of the San Francisco Fed, will deliver a speech. At 20:30 UTC+8, the U.S. September CPI year-over-year and month-over-month data will be released, along with the initial jobless claims for the week ending October 5. At 22:30 UTC+8, Thomas Barkin will participate in a fireside chat. At 23:00 UTC+8, John Williams, the permanent FOMC voting member and President of the New York Fed, will discuss the economic outlook and monetary policy.On Friday at 20:30 UTC+8, the U.S. September PPI year-over-year and month-over-month data will be released. At 21:45 UTC+8, Austan Goolsbee and Fed Governor Michelle Bowman will attend the 18th Annual Community Bankers Symposium. At 22:00 UTC+8, the preliminary October one-year inflation rate expectations and the University of Michigan Consumer Sentiment Index will be published. At 22:45 UTC+8, Lorie Logan will participate in a panel discussion.

October 5, 2024

Chicago Fed President Goolsbee Praises Latest Nonfarm Payrolls Report, Signals Potential Rate Cuts

Chicago Federal Reserve President Austan Goolsbee has described the recent U.S. nonfarm payrolls report as "excellent" and expressed optimism that more similar data would confirm the economy's move towards full employment with low inflation. Goolsbee also pointed out that the resolution of the port strike is positive news for the economy, adding to his confidence in current economic stability.However, Goolsbee acknowledged that broader indicators suggest a cooling labor market and potential for inflation to dip below the Federal Reserve's 2% target. He suggested that, with interest rates currently above the "steady state" level, "substantial" rate cuts may be justified over the next 12 to 18 months, in line with expectations from many policymakers.

October 4, 2024

U.S. Stock Indices Open Higher Following Strong September Jobs Data

According to BlockBeats, on October 4, the release of stronger-than-expected September non-farm payroll data led to a positive opening for the three major U.S. stock indices. The Dow Jones Industrial Average opened with a 0.56% increase, the S&P 500 index rose by 0.76%, and the Nasdaq Composite Index saw a 1.2% gain.

October 4, 2024

U.S. September Job Growth Accelerates, Reducing Need for Major Fed Rate Cuts

According to BlockBeats, U.S. job growth accelerated in September, diminishing the necessity for significant rate cuts by the Federal Reserve in its remaining two meetings this year. The U.S. Department of Labor's Bureau of Labor Statistics released a report on Friday indicating that non-farm payrolls increased by 254,000 in September, following an upward revision to 159,000 in August. Federal Reserve Chairman Jerome Powell recently countered investor expectations of a 50 basis point rate cut in November, stating that the committee does not feel an urgency to lower rates swiftly.

October 4, 2024

U.S. September Nonfarm Payroll Report to Be Released Amid Fed Rate Cuts

According to Odaily, the United States will release its September nonfarm payroll report on Friday, October 4, at 20:30 UTC+8. This report is significant as it is the first since the Federal Reserve opened the door to rate cuts with a 50 basis point reduction. It is also one of the two nonfarm payroll data releases before the November meeting. With inflation receding, the performance of the job market has become the Federal Reserve's primary concern.A Reuters survey indicates that nonfarm payrolls are expected to increase by 140,000 in September, significantly lower than the average monthly increase of 202,000 over the past 12 months. The unemployment rate is anticipated to remain unchanged at 4.2%. Despite the Federal Reserve's rate hikes, the U.S. economy has shown remarkable resilience, avoiding the widely predicted recession. However, the job market has gradually lost momentum. From June to August, the average monthly net increase in new jobs was only 116,000, the lowest three-month average since mid-2020.Last month, the Federal Reserve cut rates by 50 basis points to a range of 4.75%-5.00%, marking the first rate cut since 2020. This move aimed to alleviate growing concerns about the health of the labor market. Federal Reserve Chairman Jerome Powell stated on October 1 that he does not want the job market to continue cooling. Analysts expect the Federal Reserve to cut rates again in November and December, though the extent of these cuts remains uncertain. Powell mentioned that if the economy performs as expected, there would be two more 25 basis point rate cuts this year.

October 4, 2024

Federal Reserve's Losses Surpass $200 Billion

According to Odaily, the Federal Reserve's losses have exceeded the $200 billion mark this week, as reported by data released on Thursday. The Fed's report indicates that as of Wednesday, its so-called remittances to the Treasury stood at a negative $201.2 billion. This figure represents a book loss, but Fed officials have emphasized that it will not impair their ability to conduct monetary policy.Chicago Fed President Austan Goolsbee reiterated on Thursday that interest rates need to be 'significantly' lowered next year. With the Fed's recent 50 basis point rate cut and the prospect of further easing, the pace of future losses may slow, as the interest expenses required to maintain the rate target will decrease. However, before the Fed can resume returning cash to the Treasury, it must effectively repay deferred assets, a process that could take several years.

October 4, 2024

Active U.S. Funds Underperform Market Due to Low Nvidia Allocation

According to Odaily, active U.S. funds have not outperformed the market this year, with a key factor being their underweight position in Nvidia. Despite Nvidia's popularity on Wall Street, many large investors remain cautiously optimistic about the stock. Bank of America Global Research analyst Vivek Arya and his team recently conducted a quarterly review of semiconductor stock holdings in active funds. The findings revealed that although Nvidia is the most held semiconductor stock in active funds, with a holding rate of approximately 70%, its relative weight is still considered 'low.' Arya noted that Nvidia's relative weight is 0.99 times, significantly lower than the top 16 peers in the information technology and communication services sectors, even though Nvidia's sales growth potential could be more than five times that of these companies. Companies with higher relative weights than Nvidia include Meta, Salesforce, Microsoft, and Alphabet. In the semiconductor industry, companies like Applied Materials, KLA, and Micron Technology also have higher relative weights.

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