Important News on the RMB and Foreign Exchange Markets

1. Despite the ongoing banking turmoil and deteriorating economic outlook in the US region, the job market remains strong. According to data released by the US Bureau of Labor Statistics, 253000 new non farm workers were added in April, far exceeding market expectations of 180000; The unemployment rate has dropped to 3.4%, a new low since 1969; Salary has accelerated and the average hourly salary of employees has increased by 0.5% month on month. US short-term interest rate futures traders believe that the possibility of the Federal Reserve raising interest rates in June is very low.

2. The Federal Reserve, Brad, has expressed support for a 25 basis point rate hike this week. Economic recession should not be taken as the basic situation. The basic situation is slow economic growth and a decrease in inflation, but there are certain risks. The committee believes that the current monetary policy has been sufficiently tightened. The interest rate has reached a sufficiently restrictive level.

3. The European Central Bank has released a quarterly survey report, predicting that the eurozone economy will grow by 0.6% this year, slightly higher than the 0.2% predicted in the previous quarter; It is expected that the inflation rate in the eurozone will reach 5.6% this year, lower than the 5.9% predicted in the previous quarter. The European Central Bank has released a quarterly survey report, predicting that the eurozone economy will grow by 0.6% this year, slightly higher than the 0.2% predicted in the previous quarter; It is expected that the inflation rate in the eurozone will reach 5.6% this year, lower than the 5.9% predicted in the previous quarter.

4. The scale of China’s foreign exchange reserves has risen for two consecutive months, reaching a new high in nearly 14 months. As of the end of April, the scale of China’s foreign exchange reserves was $3204.766 billion, an increase of $20.894 billion compared to the previous month. The State Administration of Foreign Exchange stated that in April, due to factors such as global macroeconomic data and expectations for monetary policies in major economies, the US dollar index fell and global financial asset prices overall rose. Under the combined effects of exchange rate translation and asset price changes, the scale of foreign exchange reserves increased in the current month. Data also showed that the People’s Bank of China continued to purchase gold. At the end of April, gold reserve stood at 66.76 million ounces, an increase of 260000 ounces month on month, the sixth consecutive month of increase in holdings.

5. In terms of data, China will release April’s foreign trade, inflation, and credit data this week; The United States will release April CPI and PPI data. On the central bank side, the Federal Reserve will release the 2023 Financial Stability Report; The Bank of England will announce an interest rate decision.