Markets Weekly July 8th

Hello, my friends. Today is July 8th. My name is Joseph and this is Markets Weekly. This week, we're going to be markets focused and we're going to talk about three things. First, we got to talk about the global surge in bond yields with the 10-year US Treasury now above 4%.

大家好，朋友们。今天是7月8日。我叫约瑟夫，这里是《市场周报》。本周，我们将聚焦市场，并谈论三个问题。首先，我们必须讨论全球债券收益率的激增，美国10年期国债收益率已经超过了4%。

Secondly, we'll talk about whether or not the top is in for the US equity markets for this year. And lastly, we're going to talk a bit about the currency markets because there have been some big moves against the dollar this week.

其次，我们将讨论美国股市今年是否已经达到了顶点。最后，我们将谈一谈货币市场，因为本周对美元的走势有些大幅波动。

Okay, starting with the bond market. Now, if you followed me for any link of time, then you know that my global macro view for the next decade is a steady rise in yields. My belief is that we have a structural fundamental regime change in how the world works and the bond bull market that has been kicking around for the past few decades is over.

好的，我们从债市开始讲起。如果你有一段时间一直听我讲，那你就知道我对未来十年的全球宏观观点是收益率稳步上升。我相信，我们正在经历一个结构性的基本制度变革，这将改变世界的运作方式，过去几十年一直存在的债券牛市已经结束了。

And just last week, recall, I made this comment. And they might be forced to catch up a bit. So, you know, I know they penciled in two more rate hikes by the end of this year. I think there's upside risk to that. And I think from what I'm watching the price action this past week, there's a little bit of indication that the bond market is becoming to realize that, you know, the Fed doesn't have things under control. And we might see yields kind of steadily move up again. It looks like we've been consolidating.

就在上周，回想一下，我发表了这个评论。他们可能被迫稍微加快步伐。所以，你知道，我知道他们计划在年底前再加息两次。我认为这存在上行风险。从我观察到的上周价格走势来看，债券市场似乎开始意识到，美联储控制不住局势。我们可能会看到收益率再次逐步上升。看起来我们一直在巩固。

But as you guys, if you follow me enough, you know that my view is that yields are going to turn higher for these coming years. And we should be above 4% by the end of the year.

但是如果你们够了解我，你们就会知道，我认为收益率在未来几年会上升。到年底时，收益率应该会超过4%。

Now, fast forward to today. This past week, we saw the US 10-year yield jump across 4% and stay there for a couple of sessions. Now, the proximate cause for that rise is the ADP job support. The ADP is a giant payroll processing company. So, if you work for a company in the US, your company will usually pay you through a vendor that processes those payments. A very big, such payroll processing company is called ADP. And because of their size in the US economy, they have a pretty good grasp of how the US job market is performing. And so they produce a monthly report where they estimate how many jobs the US economy created.

现在，跳到今天。在过去的一周中，我们看到美国10年期收益率突破了4%并在几个交易日内保持了这个水平。现在，这种上涨的直接原因是ADP的就业报告。ADP是一家巨大的工资处理公司。因此，如果你在美国的一家公司工作，通常你的公司会通过一个处理这些支付的供应商来支付你。一个非常大的，这样的工资处理公司就是ADP。由于他们在美国经济中的规模庞大，他们对美国就业市场的表现有着相当好的把握。因此他们每月会发布一个报告，估计美国经济创造了多少个工作岗位。

The expectation was that ADP would say, yeah, we're going to, we created about 200,000,000 jobs. But ADP actually reported the creation of 500,000 jobs, which is an enormous beat. Now, the bond market took one look at that and just kind of freaked out and yields soared higher.

预期是ADP将会说，是的，我们创造了大约200,000,000个工作岗位。但实际上，ADP报告了创造了500,000个工作岗位，这是一个巨大的超出预期。现在，债券市场看到这个数据后陷入了恐慌，债券收益率飙升。

Now, a couple of days afterwards, we got the real non-farm payroll report on Friday. And it actually seemed to disappoint a little bit where the amount of jobs created was just a little bit more than 200,000, which is a bit less than expectations. The bond markets, you know, at first kind of gave back a little bit of those gains. The bond yields first retreated a bit, but afterwards, the 10 years still settled above 4%.

现在，几天后的星期五，我们得到了真正的非农就业报告。实际上，这个报告似乎令人有点失望，创造的工作岗位数量仅略多于20万，低于预期。债券市场开始回撤了一部分收益。债券收益率开始稍微下降，但随后，十年期的收益率仍保持在4%以上。

Now, that's what happened in the US. If you zoom out a bit, you'll also notice that bond yields in other countries also surged in the UK. If you recall, last year, there was some, a little bit of a panic in the UK gilt market where the longer dated UK gilts soared higher amid low liquidity and amid some fundamental factors like the beginning of Bank of England conducting QT and very, very large spending plans by the UK government. Well, the 10 year UK gilt yields are now above the peaks of last year and seemingly continue to trend higher. What's happening there is very high inflation and economy performing better than expected. And of course, the Bank of England continuing to raise rates.

现在，这就是在美国发生的事情。如果你放大一点，你也会注意到其他国家的债券收益率也在英国大幅上涨。如果你回想一下，去年英国债市曾出现一些恐慌，由于低流动性和一些基本因素，如英国央行开始进行减持政策，以及英国政府的非常庞大的支出计划，长期英国国债的价格飙升。现在，英国10年期国债收益率已经超过了去年的峰值，并且似乎继续上升趋势。那里正在发生的是非常高的通胀和经济表现优于预期。当然，英国央行也继续加息。

Now, if we look at Canada, who also had their job reports last week, again, their job reports were above expectations showing that the economy is doing fine, which of course implies that the Bank of Canada will continue hiking. And so their years are going higher as well. So all that happened last week.

现在，如果我们看看加拿大，他们上周也发布了就业报告，同样地，就业报告超出了预期，显示出经济发展良好，这当然意味着加拿大央行将继续加息。因此他们的年收入也在增加。所以这就是上周发生的一切。

Now, let's zoom out a little bit more and look at the context where all this is happening. The context is that over the past few months, there's been a lot of people and you can see this in social media who have been saying time and time again that we are in a recession, we're going to be the recession and so forth. And those people have been buying bonds. I have some work from my blog post titled back to 2019 that shows that a lot of the real money managers, let's say the pension funds insurance companies, no, let's say endowments and so forth have probably been increasing their allocation to fixed income to bonds.

现在，让我们再往外放大一点，看看所有这些事情发生的背景。背景是，在过去几个月中，有很多人（可以在社交媒体上看到）一遍又一遍地说我们正处于衰退中，我们将陷入衰退等等。而这些人一直在买债券。我在我的博客文章《回到2019年》中有一些工作，显示很多真正的资金经理（比如养老基金、保险公司等）可能在增加他们对固定收益（债券）的配置。

So this trade that the world is going into recession. So we got to buy bonds because one, a growth was slowing to central bankers are going to cut rates has been a very consensus trade and it's been absolutely totally completely wrong.

所以，世界正在陷入衰退的贸易。因此，我们必须购买债券的原因是：一，增长放缓，央行将降息已是普遍共识的贸易策略，但这种策略完全错误。

The U.S. economy, bio accounts is doing fine and not just in the U.S. in many other countries as well. So if you were buying bonds, thinking that inflation would come down growth would slow central banks are cut rates, well, you got to rethink that whole thing and that rethink is happening right now. And so we see global bond yields rising in my, from my personal perspective, I believe that the U.S. tenure yield will continue to trend higher and the highs are not in yet for this year.

美国经济以及生物资产在美国以及其他许多国家都表现良好。因此，如果你正在购买债券，并认为通胀将降低、经济增长将放缓，央行将降息，那么你需要重新思考整个情况，这种重新思考正在发生。因此，我们看到全球债券收益率上升。从我个人的角度来看，我相信美国十年期国债收益率将继续上升，并且今年的高点尚未出现。

One thing I would also note is that the nonform payroll report in the U.S. seemed to be disappointing a little bit because the amount of jobs created was not as much as the headline would suggest. But I'd also point out that the wages also accelerated. Now, so you can read this in a couple of ways. Is it that the demand for labor in the U.S. economy is declining, suggesting that U.S. economy is cooling or is it that we're running out of people to hire? And so naturally, if you have less people to hire, you can build as many jobs, you can't create as many jobs. And also the cost of labor is going to increase, basically a shortage of labor.

我还想指出的一件事是，美国的非农薪资报告似乎有点令人失望，因为创建的就业岗位数量并不像标题所说的那样多。但我还要指出工资也在上涨。现在，你可以用几种方式来解读这个情况。是美国经济对劳动力的需求在下降，暗示着美国经济在冷却，还是我们正在用尽雇员资源？当然，如果你可以雇佣的人越来越少，你就无法创造出如此多的工作岗位。而且劳动力的成本也会增加，基本上是劳动力短缺。

So that's an interesting question that I'll write about in my blog this week. And if you believe that yields are going to trend higher, as I do, then you actually have to also think about the other major markets, which brings us to our next topic. Is the top in for U.S. equity markets? And my belief is that yes, I think the top is in for the U.S. equity markets. Frankly, as I've been saying over the past, I guess, few weeks, my perception is what of what happened over the past few weeks is that because many people were thinking that we were going into a recession, well, the recession trade is actually very standard for big money. It's the buy bonds, yes, of course, Fed cut rates, but also, of course, to buy stocks because, you know, over the past few decades, the relationship between red cuts and, you know, stock prices going higher, especially a big tech has been strong. And so that's been the trade over the past few months. And that kind of got of ahead of itself, it seems, because the tech stocks just go higher and higher. And in addition to this classic recession trade, we also had a lot of excitement involving AI.

这是一个有趣的问题，我会在本周的博客中写一下。如果你相信收益率将会上升，就像我一样，那么你还必须考虑其他主要市场，这就带我们来到下一个话题。美国股市的最高点已经到来了吗？我的观点是，是的，我认为美国股市已经达到了最高点。坦率地说，就我在过去几周一直在说的，我认为在过去几周发生的事情中，因为很多人认为我们进入了衰退，所以衰退交易实际上是很常见的大额交易。是购买债券，当然，联邦储备委员会降息，但同时也包括购买股票，因为你知道，在过去几十年，利率下调和股票价格上涨之间的关系，尤其是大型科技股方面，一直很强。所以在过去几个月里，这一直是交易的主流。似乎这一切都有点超前，科技股不断攀升。除了经典的衰退交易，我们还有很多关于人工智能的兴奋。

Now, it seems like that the indexes seem to be encountering some resistance. That's to say, they're losing a bit momentum. And if you have yields continuing to go higher, I think it's going to be more difficult for the equity markets to continue to march higher. There's a couple ways to think about the relationship between bond yields and equity markets. One, you have classic old school fundamental valuation people who are becoming increasingly rare, who will look at, let's say, cashflow or have some kind of model and say, well, I have this forecast for the cashflow of a company, but I have to discount that by interest rates.

现在，似乎股指遇到了一些阻力。也就是说，它们失去了一点势头。如果收益继续上升，我认为股票市场将更难持续上涨。我们可以从几个方面来思考债券收益率和股票市场之间的关系。首先，有经典的老派基本估值人士，他们已经变得越来越稀缺，他们会看一下现金流或者采用某种模型，并对公司的现金流做出预测，但需要根据利率来贴现。

If interest rates are rising, then of course, when I discount that back into my DCF model, the valuation has to go lower. That's a classic view and not one that I pay attention to. What I find more interesting is that when you have bond yields go higher, well, you're going to have more people who want to buy bonds. And if you are an investor that holds a balanced portfolio, let's say 60 40 or something like that, bond yields going higher. I'm having losses on my bond portfolio in order to maintain my 60 40 allocation. Well, I got to sell some stocks and rebalance into bonds. And that mechanically means lower equity prices since people are selling equities and taking the money to buy bonds and to maintain their portfolio allocation.

如果利率上升，当我折现到我的现金流量贴现模型中时，估值必然会降低。这是一个经典观点，但我并不太关注它。我认为更有趣的是，当债券收益率上升时，会有更多人想要购买债券。如果你是一个持有均衡组合的投资者，比如60:40之类的比例，债券收益率上升会导致债券组合的损失，为了保持60:40的配置，我必须卖掉一些股票并重新配置到债券中。从机械上讲，这意味着股票价格下降，因为人们正在出售股票并拿钱去购买债券以保持他们的投资组合配置。

And some other indicators that I look at are other markets that have seemingly been leading a the charge higher. And that is the Japanese stock market index. Now, if you would then pay attention to the Nikkei, which is Japan's big stock market index, you'll notice that it's been rocketing higher. Couple stories for that. One is that there's a lot of foreign investors pouring in, Warren Buffett, notably seem to have confidence in the Japanese market. But you also note that even as central banks across the world have been raising rates, the Bank of Japan basically has been standing put.

我还关注其他一些指标，例如看似一直在引领上涨势头的其他市场。其中一个就是日本股市指数。如果你关注一下日经指数，你会注意到它一直在快速上涨。其中有几个原因。一方面，有很多外国投资者涌入，例如沃伦·巴菲特显然对日本市场充满信心。但你还会注意到，虽然全球各国央行都在加息，但日本银行基本上维持原状，没有加息。

Again, if you have very loose monetary policy, high inflation, then that's pretty good for financial assets. And so the Nikkei has been on a tear. But if you will also notice over the past couple of weeks, it's been losing moments and it's been gradually declining. And in line with that, the Japanese yen has also been strengthening. Now, these two asset classes, the yen and the Nikkei seem to have been leaders on this risk on movement over the past few months. And they're lagging right now.

再次，如果你实行宽松的货币政策，通胀率很高，那对金融资产来说是相当不错的。因此，日经指数一直走高。但是，你也会注意到，在过去几周里，它开始失去势头，逐渐下降。与此同时，日元也在走强。现在，这两个资产类别，即日元和日经指数，在过去几个月里似乎一直是风险偏好的领头羊。而它们现在正落后于其他资产。

So again, that's another caution. So you got higher yields, you got the leaders kind of faltering a bit. So from my perspective, it would make sense that at the very least we'd have some notable pullback in the US equity markets. I'm not saying that we're going to have some kind of large crash. But it doesn't really make sense for us to continue to go higher at the very least that I would say that we would digest a bit. So I would have a lot of caution there, especially since sentiment has also been very emulate.

再说一遍，这是另一个警告。你获得了更高的收益，但市场领导者有点犹疑不决。所以从我的角度来看，至少在美国股市中我们应该会有一些明显的回调是有道理的。我并不是说我们会发生某种大规模崩盘。但至少我认为继续上涨并没有太多意义，我想我们至少会有一些消化期。所以我对此非常谨慎，尤其是因为市场情绪也变得非常模拟。

Now, the last thing we'll talk about this week is currency markets. Now, I had I saw a very interesting reaction to the most recent non-form payrolls. That is to say, the dollar sewed off pretty aggressively. So global bond yield to sort equity markets kind of corrected a bit and the dollar sewed off aggressively. So if you look at dollar against euro, you can see euro USD inching towards 1.1. You can see the dollar against pound also dollar selling off pound inching towards 1.3.

现在，这周我们要讨论的最后一个话题是货币市场。现在，我看到了对最近的非农就业数据非常有趣的反应。也就是说，美元相当大幅度地下跌。因此，全球债券收益率以股票市场有所调整，而美元则急剧下跌。所以，如果你观察美元对欧元的情况，你可以看到欧元兑美元正逐渐接近1.1。你也可以看到美元对英镑的情况，美元也在下跌，英镑兑美元正逐渐接近1.3。

So I find that to be surprising for a couple reasons. One, of course, if the US economy is strengthening or at least stronger than expected, you'd expect the Fed to continue to hike rates or at least not cut rates, which the market is increasingly able to increasingly understanding. So all things equal, I would have expected the dollar to strengthen. And secondly, when I look at the relative strength of the US economy against, let's say, the Eurozone and the UK, it does seem like the US economy is much stronger.

所以我发现这件事出人意料的原因有几个。首先，当然，如果美国经济正在增强或至少强于预期，你会期待美联储继续加息或至少不降息，市场也越来越能够理解这一点。所以其他条件不变的情况下，我本来期望美元会坚挺。其次，当我观察美国经济相对于欧元区和英国的强势时，似乎美国经济要强大得多。

So, one possibility for US stock weakness could have been that the expectation that rate hikes would be more aggressive in those other countries. And that could be the case, especially in the case of the UK, where the market seems to be pricing short-term rates as high as 6.5%, which is comfortably higher than what the Fed is probably going to go. But I'd also note, though, that it's not when you're talking about currencies, short-term interest rate differentials matter, but also the damage it does to one's economy.

因此，美国股市疲弱的一个可能原因是其他国家加息预期更强烈。这种情况可能存在，尤其是对于英国来说，市场似乎将短期利率定价为高达6.5％，这显然超过了联邦储备系统可能采取的水平。但我也要指出的是，当涉及到货币时，不仅短期利率差异很重要，对经济造成的损害也非常关键。

Now, as interest rates go higher, they're not going to have the same impact on every economy because every economy is structured differently. In the US, some of the things that make the US economy very resilient to interest rates is, of course, that our mortgages are 30 years and fixed. So when the Fed hikes to 5% or 6%, most people are not going to feel that, so it's not going to have a big impact. And, of course, because we are the reserve currency, when our government is engaging in tremendous fiscal spending, which we are right now, it doesn't have.

现在，随着利率的上升，它们对每个经济体的影响并不相同，因为每个经济体的结构都不同。在美国，使得美国经济对利率非常弹性的原因之一，当然是我们的抵押贷款是30年固定利率的。因此，当美联储将利率提高到5%或6%时，大多数人不会感受到这种变化，因此不会产生很大的影响。当然，因为我们是储备货币，当我们的政府进行庞大的财政支出时，目前正处于这种情况下，它也没有。

So, people continue to be willing to hold our debt, and so it doesn't have as big an impact on our yields as other countries. For example, remember, last year, the UK government announced big deficit spending, and the UK market basically imploded. Now, at the same time, if you're looking for countries like in the UK, which has a lot of shorter-dated mortgages, or in the Eurozone, where some countries have lots of shorter-dated mortgages, that really puts a constraint as to how high you can raise interest rates.

所以，人们继续愿意持有我们的债务，这就使得它对我们的收益率没有像其他国家那样有着巨大影响。例如，记住，去年英国政府宣布了大规模的赤字支出，结果英国市场基本崩溃。同时，如果你正在寻找像英国这样拥有大量近期到期抵押贷款的国家，或者在欧元区，一些国家拥有大量近期到期抵押贷款，这真的对你能够提高利率的幅度设置了限制。

And so, if you're thinking that inflation is a global problem, then my expectation would be that even if those other countries raise rates aggressively, they won't really have to stay there very long, because soon it'll be very effective, whereas in the US, they really do have to stay higher for longer to get the same impact. So when I see that the dollar is selling off of good U.S. economic data, I think that's not the right reaction. So my expectation would be for that to revert. I think in my personal view is that the dollar actually strengthens from here on, as we become clear, that the U.S. economy is fine. Rates have to stay higher for longer, and that rates can stay higher for longer in the U.S.

因此，如果你认为通货膨胀是一个全球性问题，那么我的预期是，即使其他国家采取了积极加息的措施，他们也不需要长时间保持这种状态，因为很快就会产生明显效果，而美国则需要保持较高的利率更长时间才能达到同样的效果。所以当我看到美元在美国经济数据不错的情况下出现抛售时，我认为这不是正确的反应。因此，我的预期是美元将会回归。从我的个人观点来看，随着我们认识到美国经济良好，利率必须更长时间保持较高水平，而美国的利率也能够更长时间保持较高水平，我认为美元将会从现在开始走强。

Okay, so that's all I prepared for today. Hope you found it useful. If you like what I'm producing, please remember to like and subscribe. If you're interested in hearing my latest thoughts, check out my blog, fedguy.com. And of course, if you're interested in taking courses on macro markets, I have a series called Central Banking 101, where I'm sorry. I have website, Central Banking 101, where I have a course called Markets 101, where I teach you about various macro asset classes. It is basically the same course that I helped teach when I was at the Fed, trading or junior traders. All right, that's all for today. Thanks so much.

好的，那就是我今天准备的全部内容。希望你觉得有用。如果你喜欢我制作的内容，请记得点赞和订阅。如果你对听取我最新的想法感兴趣，可以查看我的博客fedguy.com。当然，如果你对参加宏观市场课程感兴趣，我有一系列名为《中央银行学101》的课程。对不起，我有一个网站叫《中央银行学101》，我在里面有一个名为《市场学101》的课程，教你关于各种宏观资产类别的知识。这基本上是我在联邦储备系统时帮助教授的相同课程，适用于交易员或初级交易员。好的，以上就是今天的全部内容。非常感谢。