In today’s briefing:
- CX Daily: Wang Yi Replaces Qin Gang as Foreign Minister
- Powell Is Done, but Whether the Fed Is Too Depends on the Data
- One or Two More Fed Rate Hikes? Comparing Today to the Last FOMC Meeting
- Pause Watch: 25 bps and then a pause!?
- Thailand : A Judicial War Against Pita
CX Daily: Wang Yi Replaces Qin Gang as Foreign Minister
- Funds: China’s new rules for private funds are just the beginning
- Personnel: Wang Yi replaces Qin Gang as foreign minister
- Corruption: Former Communist Party chief of Hangzhou gets suspended death sentence for bribery
Powell Is Done, but Whether the Fed Is Too Depends on the Data
- Powell sounded much more dovish than during the previous FOMC meeting and had just one message: the Federal Reserve is now fully data-dependent regarding future monetary policy.
- Powell believes the Fed is done and highlighted the balance between doing too much or too little. Before, the Fed had shown a clear willingness to risk doing too much.
- Since the market was driven by central bank ‘hopium,’ Powell has taken a key catalyst from markets to move higher.
One or Two More Fed Rate Hikes? Comparing Today to the Last FOMC Meeting
- The latest US inflation data would allow the Federal Reserve to consider ending the tightening cycle after July’s rate increase.
- However, Powell’s hands are tied due to repeatedly emphasizing the need for a weaker US labor market, especially since macro data has come in better than expected.
- Ironically, a surprise end to the Fed’s tightening cycle could have a negative impact on stock markets.
Pause Watch: 25 bps and then a pause!?
- A Fed pause historically means that the recession clock starts ticking and rings in the recession when the Fed starts cutting.
- The outlook for cuts?
- That’s properly worth a watch series on its own but with long-end rates below 4%, equity markets making YTD highs, strong corporate profitability and a labor market that still shows strength, we venture to say that those cuts are likely not around the corner.
Thailand : A Judicial War Against Pita
- We are now in late July and Thailand still does not have a new Prime Minister (PM) yet.
- We believe the future is very uncertain from now until next May when the senate power to elect the PM ends.
- The uncertainty is by no means positive for Thailand’s capital market and our view toward any Thai assets remain negative in the near term.
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