Weekly Macro Matters
Macro Matters – Weekly review, w/c November 6
The Federal Reserve held interest rates steady last week, signalling a cautious but slightly optimistic stance on economic growth. Key developments included Treasury bond auctions, the BoE maintaining its hawkish tone, and Apple reporting a fourth consecutive quarter of declining revenue.
Macro Matters – Weekly Review, w/c November 6
Macroeconomic / Geopolitical Developments
• Fed Slightly Upbeat and Reduced Hawkishness
• US Treasury Announces Future Bond Sales, At the Lower End of Market Expectations
• BoE Leaves Rates Unchanged, Maintains Hawkish Tone Amid Recession Concerns
• Apple Earnings Report Slumps
• US PMI Data Slightly Disappoints
• US Employment Report
Fed Slightly Upbeat and Reduced Hawkishness
The Federal Reserve kept interest rates steady for the second consecutive meeting, maintaining the target range at 5.25–5.50%. Acknowledging “strong” economic activity and tighter financial conditions, the Fed refrained from signalling a peak in its policy rate, preferring to assess the impact of previous hikes. Following the decision, US stocks surged, while Treasury yields declined, reflecting market optimism around a possible end to the Fed’s tightening cycle.
US Treasury Announces Future Bond Sales
The US Treasury unveiled plans to increase debt auction sizes, addressing its substantial debt burden. A $112 billion debt auction this week will refund $102.2 billion in maturing notes. Despite higher borrowing needs, auction sizes are at the lower end of market expectations, providing relief to investors. Longer-term debt increases will be implemented more gradually, with Treasury yields declining post-announcement.
BoE Leaves Rates Unchanged, Maintains Hawkish Tone
The Bank of England held rates at 5.25% but maintained a hawkish stance, citing inflation risks and geopolitical tensions. Governor Andrew Bailey warned of potential recession risks, forecasting zero GDP growth for 2024. Despite market relief over the decision, the BoE hinted at possible future hikes to combat inflation.
Apple Earnings Report Slumps
Apple reported its fourth consecutive quarter of declining revenue, down 1% year-over-year to $89.5 billion. While iPhone and services revenue set records, Mac and iPad sales dropped significantly. Despite these challenges, Apple’s services segment showed resilience, supported by subscription growth and price increases.
US PMI Data Slightly Disappoints
The ISM Manufacturing PMI fell to 46.7 in October, marking the 12th consecutive contraction, influenced by UAW strikes. Meanwhile, ISM Non-Manufacturing PMI declined to 51.8, reflecting a slowdown in the services sector. Both indices suggest economic pressures from elevated borrowing costs.
US Employment Report
October’s employment report showed 150,000 new jobs, below expectations, with a revision subtracting 101,000 jobs from the prior two months. The unemployment rate rose to 3.9%, the highest since January 2022. Despite signs of labour market weakness, Treasury yields fell, reflecting expectations of a potentially earlier Fed rate cut in 2024.
What’s Ahead
• General: US Daylight Saving Time ended, normalising time differences with other regions.
• Central Bank Watch: BoJ Meeting Minutes (Monday), RBA Interest Rate Decision (Tuesday), and Fed Chair Powell’s remarks (Wednesday).
• Macro Data Watch: European Services and Composite PMI (Monday), China trade data (Tuesday), German CPI (Wednesday), and UK GDP and Industrial Production (Friday).
Please see our Terms of Use for additional details and restrictions.
Permitted products: Tradeday traders are allowed to trade listed Futures products only; we allow trading on the following exchanges: CME, CBOT, NYMEX, and COMEX. Trading of Stocks, Options, Forex, Cryptocurrency, and CFDs are not permitted nor available in our program or platforms.
Risk Disclosure: Futures trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. You should only put capital at risk that you can afford to lose. Past performance is not necessarily indicative of future results.
Evaluation Challenge Disclaimer: The trader pass rate of the evaluation program was 28.2% between October 2023 and March 2024. The evaluation is a realistic simulation of trading under actual market conditions and is difficult to pass even for experienced traders. Testimonials appearing on this website may not be representative of other clients or customers and are not a guarantee of future performance or success.
Simulated Trading; CFTC Rule 4.41: During the Evaluation Challenge, users trade in simulated markets. Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown.
Refund Policy: TradeDay works with a number of third-party service providers that require immediate commitment from TradeDay when an account is opened, as such we are unable to offer a refund after purchase. If you are unsure that TradeDay is the right place for you we strongly recommend you take the 14-day free trial where there is no obligation to purchase, and no credit card is needed to sign up. All membership fees are considered used in full.
TradeDay is not registered in any capacity with the SEC or CFTC.28.2