On the evening of October 13, Beijing time, Data released by the U.S. Bureau of Labor Statistics showed that the U.S. CPI rose 8.2% year-on-year in September, estimated at 8.1%, and the previous value was 8.3%; the U.S. CPI rose 0.4% month-on-month, estimated at 0.2%, and the previous value was 0.1%.
After excluding the volatile food and energy prices, the US core CPI rose 6.6% year-on-year in September, not only higher than the market expectations of 6.5% and the previous value of 6.3%, but also hit a new high since August 1982 again; the core CPI rose 0.6% month-on-month, 0.4% higher than the market expectations of 0.4%, and remained the same as the previous value.
Fed 11 hike rate is near, as a key guide to the future rate hike rate hike, this inflation data is unexpectedly high, suggesting that the troubles of "high inflation" in the United States have not subsided, which may push the Fed to raise interest rates again by 75 basis points or even 100 basis points next month.
US stocks opened low and closed high
After the release of inflation data above expectations, the dollar index instantly violently rose by about 80 points to 113.56, and then fell back, as of press time, at 113.07.
Offshore RMB fell below 7.23 against the US dollar, a drop of 0.9%, and the decline narrowed to 0.4% as of press time. yen exchange rate against the US dollar fell below 1 US dollar for 147 yen, setting a new low since August 1998 . FTSE A50 China Index Futures fell 1.22%.
10-year US bond yield exceeded 4%, and as of press time, it fell back to 3.97%, with gaining at 1.75%.
Image source: Yingwei Financial Information
US stock opened low and closed high. At the beginning of the session, Nasdaq Composite Index fell nearly 3.2%, S&P 500 Index fell nearly 2.4%, the Dow Jones Industrial Average fell nearly 550 points and nearly 1.9%. By the end of the morning session, both of them smoothed the decline and turned to the rise. As of press time, the S&P 500 rose 0.89%, the Dow Jones Industrial Average rose 1.63%, and the Nasdaq rose 0.66%.
US semiconductor sector generally opened low and closed high. As of press time, Maywell Technology and ON Semiconductor both rose and fell 2%, Nvidia rose more than 3%, NXP Semiconductor rose 1.51%, and AMD rose 1.32%.
Large technology stocks rose and fell mixed, Amazon fell 1.6%, Tesla rose 0.69%, Google rose 0.39%, Microsoft rose 2.12%, and Apple rose 1.11%.
US stock banking sector rose, Barclays rose 8.2%, Credit Suisse rose 6.3%, HSBC Holdings rose 5%, Citigroup rose 4.5%, Bank of America and JPMorgan rose about 3.7%.
European market fell first and then rose. As of press time, the UK FTSE 100 index rose 0.39%, France CAC40 index rose 1.14%, and Germany DAX30 index rose 1.51%.
The Federal Reserve may again raise interest rates aggressively in November
Specifically, looking at inflation data, food and rental prices are still rising significantly, and owners' equivalent rents rose by 0.8% month-on-month in September, the largest single-month increase since June 1990. Housing costs are the largest component of the service industry, accounting for about one-third of the overall CPI index, and have risen by 0.7% month-on-month for the second consecutive month; food costs have risen by 0.8% month-on-month for the second consecutive month, up 11.2% from a year ago.
Some indexes achieved a month-on-month decline in September, with the used car and truck indexes falling sharply by 1.1% in September after falling 0.1% in August. The clothing index fell by 0.3% month-on-month, and the communication index fell by 0.1% month-on-month. However, even though the energy index fell 2.1% month-on-month, the year-on-year increase still reached 19.8%, of which the price of fuel oil rose by 58.1% year-on-year.
According to CNBC, another report released by the U.S. Bureau of Labor Statistics on the same day showed that rising costs mean more bad news for workers. After inflation adjusted, the average hourly wage of American workers fell by 0.1% month-on-month and 3% year-on-year.
Since the Fed started hikes in March this year, U.S. inflation has shown a relatively strong "stickiness". Guohai Securities research report stated that if we look at the 3-month, 6-month and 12-month U.S. core PCE month-on-month annualized rate , respectively, core inflation is still running at a high level. In addition, the PCE annualized rate on a month-on-month basis in the past three months is slightly higher than the data in the past six months, indicating that the rate of inflation decline has slowed down recently.
The Federal Reserve has gradually completed five interest rate hikes this year, with a cumulative interest rate hike of 300 basis points.So, with such a large-scale interest rate hike by the Federal Reserve, why is U.S. inflation difficult for it to fade rapidly?
Guohai Securities Research Report Analysis: There are three stubborn crux of current US inflation: First, global demand is resilient, and the price of commodity is still running at a high level; second, the rise in housing prices in the early stage drove the continuous rise of rental prices, becoming the "mainstagram" of current US inflation; third, the decline in labor participation rate has led to "difficulty in recruiting workers", which has led to a "salary inflation spiral".
According to the Chicago Mercantile Exchange FedWatch, as of press time, the market expects that the probability of the Federal Reserve raising interest rates by 75 basis points in November will rise to 97.8%; the probability of aggressive interest rate hikes by 100 basis points is 2.2%; the market seems to have completely ruled out the possibility of 50 basis points hikes.
The minutes of the Fed's September meeting released on Wednesday showed that the Fed is expected to continue hikes until it sees inflation fall. However, some policymakers also pointed out that it would be appropriate to slow down the pace of rate hikes at some point in time when assessing the impact of a range of policies on economic activity and inflation accumulation.
Principal Global Investors strategist Seema Shah pointed out: After today's inflation report is released, no one in the market believes that the Fed's interest rate hike will be less than 75 basis points at its November meeting. In fact, if this surprise of higher-than-expected rate hikes reappears next month, we may see a fifth consecutive rate hike of 75 basis points in December, with policy rates breaking the Fed's highest rate forecast by the end of this year. Quincy Krosby, chief global strategist at
LPL financial, pointed out that since the last meeting, Fed officials have been sending a message that their commitments remain firm and that the Fed will continue to raise interest rates even in the face of financial risks and recession.
editing|Sun Zhicheng Du Hengfeng
proofreading|Lu Xiangyong
Cover image self-photography network-ID: 500692551 (the picture and text are not related)
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