Macro Market Weekly: Beware of Risks, Await Changes

1. Macroeconomic Review of This Week

1. Market Overview

This week, the risk asset market continued to fluctuate and showed weakness. Aside from gold continuing its upward trend, the overall performance of U.S. stocks, cryptocurrencies, and commodities was weak. In particular, after a certain political figure made a strong statement regarding automobile tariffs, market sentiment noticeably worsened in the latter half of the week.

The cryptocurrency market has been generally calm this week but lacks upward momentum. Despite the U.S. legislature introducing a new stablecoin regulatory bill, the positive policy impact has not immediately reversed the market's downward trend. In the context of overall poor liquidity and ongoing macro uncertainties, the market direction remains to be clarified after the implementation of new tariff policies.

2. Economic Data Analysis

This week's economic data focuses on the U.S. labor market and inflation indicators. The latest GDP forecast remains at -1.8%, indicating continued weakness in economic growth.

In terms of the labor market, although weekly unemployment claims data has shown slight improvement, the long-term trend indicates that the employment situation is deteriorating. Data shows that the unemployment rate is rising in most metropolitan areas of the United States.

In terms of inflation, the PCE index in February exceeded expectations, but personal consumption expenditures declined, reflecting that the economy is facing an unfavorable combination of "weak growth + high inflation." Rising costs in the service industry are one of the main factors driving up inflation.

3. Liquidity and Interest Rate Analysis

The Federal Reserve's broad liquidity marginally continues to improve, but remains at around 6 trillion dollars.

The government bond yield curve shows a "bear steepening" trend, with long-term rates rising more than short-term rates, reflecting the market's ongoing concerns about inflation prospects. The interest rate futures market indicates that the probability of a rate cut in June has decreased compared to last week.

It is worth noting that the credit spreads of high-yield bonds continue to widen, indicating investors' growing concerns about the increasing pressures on the corporate operating environment. This may signal that the risk of economic recession is rising.

2. Macroeconomic Outlook for Next Week

1. Key Events

The biggest variable next week is the implementation of the new tariff policy. If the tariffs exceed expectations or provoke retaliation from the other party, it may have a significant impact on the fragile market.

2. Important Data

Close attention should be paid to the U.S. unemployment rate and non-farm payroll data for March to further assess the risk of economic recession.

3. Investment Advice

In the current environment of "economic weakness + high inflation + policy uncertainty", it is recommended to adopt the following strategies:

• Focus on defense to reduce exposure to risky assets.
• Moderately allocate safe-haven assets such as gold and U.S. Treasury bonds.
• Be cautious with overvalued tech stocks and crypto assets, consider reducing positions or lowering profit-taking levels.
• Avoid chasing rising prices and selling at a loss, strictly adhere to investment discipline.

Even if the impact of tariffs is lower than expected, it does not mean that the market trend has completely reversed. More macroeconomic positive support is still needed to confirm a significant improvement in risk appetite.

Overall, the current market vulnerability is high, and it is recommended that investors remain patient and wait for clearer signals to emerge.