🤩Fed Chairman Powell may end

Fed Chairman Powell may end the balance sheet reduction in a few months.

1) Dollar-Won top limit?
Last night, the dollar-won (REGN) exchange rate closed at around 1,428 won, up 3 won from the previous trading day. The dollar remained below 1,430 won amid aftershocks by the foreign exchange authorities, but rose on news that China has designated five of Hanwha Ocean’s U.S. subsidiaries. However, the top seems to have been blocked at 1,435 won. In the global market, the dollar weakened. The impact of USTR’s optimism that Trump and Xi Jinping will still meet and that they will be able to “solve” trade issues with China

2) U.S. Greer is optimistic about easing tensions with China
U.S. Trade Representative Jamieson Greer is optimistic that the recent escalating conflict between the U.S. and China over export controls will ease. Greer said the schedule for the summit between the two countries is still scheduled, noting that “it is not clear whether the summit will actually take place, but it is always desirable to talk when possible.” Greer said, “China seems to have recognized that its measures have gone too far,” and argued that the recent easing of the level of Chinese authorities’ remarks shows this. However, he maintains a cautious stance, saying it is difficult to predict when the conflict will be resolved

3) Powell ‘could finish shrinking balance sheet in months’
Fed Chairman Jerome Powell has signaled that he may end the balance sheet reduction (QT) in the coming months. “The Fed’s long-standing plan is to stop shrinking the balance sheet at a level slightly above the level where the reserve is deemed sufficient,” he said. “We may reach that point in the coming months, and we are closely monitoring various indicators to determine that.” Inflation and employment prospects have not changed significantly since the September FOMC meeting, and “lower risk of employment has widened.” While the government shutdown has delayed the release of official economic indicators, he added that he is monitoring all available data for now

4) French bond rally
The 10-year interest rate on French government bonds fell 7 basis points to a two-month low of 3.40 percent on expectations that French Prime Minister Sebastian Lecornu’s concession to the budget could calm political turmoil, sending the bond market to its best day in July. The spread of interest rates with the bunt, considered a measure of market risk, was 79 basis points, the lowest level in more than a month. The move comes as Prime Minister LeCornu has indicated his intention to hold off on pension reform, Macron’s key economic agenda, which could disrupt his goal of reducing the budget deficit but avoid political instability and the possibility of an early general election in the short term. LB Macro evaluates that the Socialist Party’s support gives France stability, even if the pace of fiscal consolidation is somewhat delayed

5) EU considers ‘compulsory technology transfer’ to Chinese companies
The European Union is considering forcing Chinese companies to transfer technology to operate in Europe. It is an aggressive new measure aimed at strengthening the competitiveness of EU industries. The measure will be applied to companies seeking to enter major digital and manufacturing markets, such as automobiles and batteries, which will have to use a certain amount of EU product or labor. The plan, due to be announced in November, applies strictly to all non-EU companies, but in reality the aim is to keep Chinese manufacturers from encroaching on Europe, sources said