🍿Macro Pulse Update 01.03.2023🍿
Some key macro highlights. We see China leading the prints and pump, while the US and EU are laggards. Japan is taking an uncertain stance.
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Here I will categorise into 3 big section
1️⃣ Macro and Key data
2️⃣ Expected outlook
3️⃣ Crypto market and predictions
1️⃣ Macro and Key data
M1. ⛔ The robust consumer spending in January and elevated monthly inflation have raised concerns among many investors.
🔹 US Govt released Jan data on disposable income, personal consumption expenditures & Fed's favored inflation measure.
Personal income grew rapidly, consumers spent most of it & disinflation slowed due to strong demand and rebound in energy prices.
🔹 Rise in income may be related to sharp employment increase & huge cost of living adjustment for Social Security recipients.
Data confirms strong consumer demand & high inflation seen in retail sales data.
🔹 The relationship between high consumer spending & high inflation remains a concern for investors.
The Fed will continue to monitor economic data to determine if any policy changes are needed.
M2. 🟢 Financial market conditions could be getting better in the United States.
🔹 US consumer debt situation concerns some, as share of auto loans to low credit rating households that are nonperforming has risen.
🔹 Tightening monetary policy and economic downturns lead to
- increased stress in corporate bond markets,
- weakening business investment and transactions, exacerbating economic fragility.
M3. 🟢 The rate of inflation in the Eurozone slowed down.
🔹 EU's final estimate of January'a inflation in Eurozone shows consumer prices up 8.6% YoY, lowest since June 2022
M4. ⛔ The rate of inflation in Japan increased.
🔹 Japanese inflation surged in January as core prices, excluding fresh food, rose 4.2% YoY, marking a 41-year high,
Core-core prices (excluding energy) climbed 3.2%, exceeding the BOJ's 2% target, suggesting underlying inflation has taken off.
Economic events for 01.03.2023
2️⃣ Expected outlook
E1. 🟢 US household financial stress is modestly up, but not at a crisis level, with declining risks to the system, despite Fed tightening.
🔹 Bond market conditions have improved, suggesting less chance of a recession and the need for further monetary tightening to control inflation.
E2. ⛔ Eurozone core prices fell while energy prices rose, indicating that inflation has peaked but underlying inflation is still strong.
🔹 Despite this, the European Central Bank plans to continue raising the benchmark rate due to the tight labor market and strong underlying inflationary pressures.
E3. 🟡 Japan's Ueda, a pragmatic technocrat, stated that it is "appropriate" to maintain an easy monetary policy but hopes to reduce its side effects.
🔹 However, it is too early to know his exact intentions as he did not discuss specifics during his confirmation hearing.
Economic events to take note for the upcoming week
3️⃣ Crypto market and predictions
C1. 🟢 Chinese manufacturing PMI released today confirmed a return to expansion, after six consecutive months of contraction.
🔹 China's manufacturing sector improved in February with a Purchasing Managers' Index (PMI) of 51.6.
Higher than the previous month's 49.2 and better than the forecasted 50.7, marking the highest level since April 2012.
🔹 Reflection of the end of China’s zero-covid strategy
🔹 @tedtalksmacro shares possible correlation between $BTC and and Chineses stocks. It shows the Chinese and US liquidity conditions.
C2. 🟢 Bitcoin could continue the current upward trajectory
🔹 With negative funding rates seen on the 12th Feb, it then led to a pump of 15% afterwards for $BTC
Here its been consolidated into a thread:
