Rattibha

🍿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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1/29

Here I will categorise into 3 big section
1️⃣ Macro and Key data
2️⃣ Expected outlook
3️⃣ Crypto market and predictions
2/29

1️⃣ Macro and Key data
M1. ⛔ The robust consumer spending in January and elevated monthly inflation have raised concerns among many investors.
3/29

🔹 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.
4/29

🔹 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.
5/29

🔹 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.
6/29

M2. 🟢 Financial market conditions could be getting better in the United States.
7/29

🔹 US consumer debt situation concerns some, as share of auto loans to low credit rating households that are nonperforming has risen.
8/29

🔹 Tightening monetary policy and economic downturns lead to - increased stress in corporate bond markets,
- weakening business investment and transactions, exacerbating economic fragility.
9/29

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
10/29

M4. ⛔ The rate of inflation in Japan increased.
11/29

🔹 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.
12/29

Economic events for 01.03.2023
13/29

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.
14/29

🔹 Bond market conditions have improved, suggesting less chance of a recession and the need for further monetary tightening to control inflation.
15/29

E2. ⛔ Eurozone core prices fell while energy prices rose, indicating that inflation has peaked but underlying inflation is still strong.
16/29

🔹 Despite this, the European Central Bank plans to continue raising the benchmark rate due to the tight labor market and strong underlying inflationary pressures.
17/29

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.
18/29

🔹 However, it is too early to know his exact intentions as he did not discuss specifics during his confirmation hearing.
19/29

Economic events to take note for the upcoming week
20/29

3️⃣ Crypto market and predictions
C1. 🟢 Chinese manufacturing PMI released today confirmed a return to expansion, after six consecutive months of contraction.
21/29

🔹 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.
22/29

🔹 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.
23/29

C2. 🟢 Bitcoin could continue the current upward trajectory
24/29

🔹 With negative funding rates seen on the 12th Feb, it then led to a pump of 15% afterwards for $BTC
25/29