On November 14, institutions summarized their views on the stock market, commodities, foreign exchange, economic prospects and central bank policy prospects:
1. Pacific Asset Management: U.S. inflation eased in October, but it may accelerate again in the future;
Tiffany Wilding, North America economist at Pacific Investment Management, said the U.S. inflation report finally eased in October and detailed data was more favorable than expected, although inflation could still accelerate again. While we still expect inflation to accelerate in the coming months, the report also adds to our confidence that the Fed will pause rate hikes in the expected 4.5%-5% range. We cut our inflation forecast for December 2023 to 3.7% from 4% previously
2. Bank of America: Investors are not ready to predict a peak in the dollar;
The Bank of America’s November foreign exchange and interest rate confidence survey showed investors were not ready to predict a top in the dollar. Only 16% of investors in the survey believe the dollar has peaked, while 26% expect it to peak in the first quarter of 2023. Despite early signs of interest in re-entering emerging markets, investors are more confident the dollar will stabilize in the short term, Bank of America analysts said in the survey.However, they said improving sentiment in emerging markets, higher cash levels and lower-than-expected U.S. inflation data for October could lead to further dollar weakness
3. Musk held his first meeting with Twitter employees;
According to the US technology media The Verge, although Twitter employees are still suffering from mass layoffs and executive resignations, Musk held a meeting to answer employees’ questions. With less than 20 minutes’ notice, Musk summoned Twitter employees for the first time on Thursday to address them directly. During the nearly hour-long question-and-answer session, Musk was outspoken about Twitter’s finances, his ambitions to turn Twitter into a payments app, his love of seeing ads promoting “gadgets,” and his current Expect employees to work with a “crazy sense of urgency.”When it comes to Twitter’s payments feature, Musk sees a lot of things that need to be done, such as video content and compensating content creators, to get content to Twitter, rather than forcing them to post elsewhere as it is now or not paying the bill
4. Capital Economics: The labor market is resilient, and core price pressures in Germany are expected to remain strong;
German core inflation rose to 5.1 percent in October from 4.7 percent in September, confirming that underlying price pressures in the country are still building, Franziska Palmas, senior European economist at Capital Economics, said in a note. The survey showed that business and retailer price expectations remained high, with core inflation expected to rise further in the coming months. “Even if Germany falls into recession, a resilient labor market will allow workers to successfully claim higher wages and keep core inflation high.” Core inflation is expected to average over 4 percent next year and stay above 2 percent in 2024
5. The UK Treasury is discussing raising the energy price cap from April next year;
The UK Treasury is considering raising the current £2,500 energy price cap from April next year and is discussing whether to announce a new policy in next week’s autumn financial report, the Guardian reported. Two sources said there was a heated debate within the Treasury over the level of support to be announced from April next year after Chancellor Hunt scrapped a related plan put forward by former Prime Minister Truss. No decision has been made, but raising the cap while adding additional support for vulnerable groups is “one of the options”. Currently, the Treasury does not have to announce the level of energy support it plans to provide until next spring, and it may choose to wait until it becomes clear whether gas and electricity prices will fall.However, the associated spending is so large that they are considering whether to include an estimated level of support in the fall report, in addition to helping people prepare for what they may have to pay.
6. Institutions: IC market will resume growth in 2Q23 but will still decline by 6% in 23 years;
The latest report from the market research agency IC insights pointed out that the IC market is expected to resume growth from the second quarter of 2023, when it will show a moderate growth of 3%. But even if IC sales start to rebound from the second quarter of next year, the total IC market for next year will still decline by 6%
7. Citi: Market worries about German deindustrialization seem overdone;
An unprecedented rise in energy prices has raised concerns about the future of Germany’s key manufacturing sector, Citigroup said in a report. The industry is already facing headwinds such as reduced competitiveness and uncertain global supply chains. Germany needs to invest heavily in energy infrastructure and resilient supply chains to maintain its economic potential. Germany’s external surplus may shrink faster than previously expected, and some structural and regional adjustments may be necessary. However, fears of Germany’s deindustrialisation may be overdone.A long-term structural shift is likely to occur, which could affect regional differences in Germany and policymaking in Europe
8. Nordea Bank: EUR/USD may rise further in the short term, but is expected to fall to 0.97 in three months;
EUR/USD has risen sharply. Economists at Nordea Bank said the dollar usually weakens during risk-on times, and we could see that in the coming weeks. The dollar is expected to weaken further in the very short term, with EUR/USD set to rise to 1.05 by early December. Still, the bank expects the euro to fall to 0.97 against the dollar in three months’ time. “The Fed’s efforts to fight inflation are not over given high wage growth and a tight labor market,” the economists said. “The Fed may raise rates next year by more than we and the market currently expect. The spread between the euro and the dollar.” There is likely to be pressure on the EUR/USD pair. Also, higher interest rates also mean that risk aversion could return to the market over the next three months, sending EUR/USD lower.”
9. Nomura Securities: The Bank of Korea may resume easing policy ahead of schedule in 2023;
Jeong Woo Park, an economist at Nomura Securities, said in a research note that the Bank of Korea may resume easing policy earlier than expected next year due to concerns over economic growth and financial stability. Credit stress and fears of a recession could prompt the Bank of Korea to restart its easing cycle, cutting rates by 25 basis points in May 2023. In addition, downturns in the real estate and export sectors could remain a potential threat to the country’s financial stability beyond 2022.Nomura expects the Bank of Korea to raise interest rates by 25 basis points each in November this year and January 2023, bringing the benchmark rate to 3.50% before ending the current tightening cycle
10. Danske Bank: The European Central Bank is expected to announce a quantitative tightening roadmap at its December meeting;
Analysts at Danske Bank said the ECB is expected to publish a quantitative tightening roadmap as the next step in its monetary policy adjustment, but a formal decision will be made at its February meeting.Quantitative tightening could start as early as April 1st, but it is also expected to start in mid-February or March 1st, with the baseline forecast being March 1st as the start date for Qt
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