The three major events that will receive global attention next week will come to a conclusion. For China, the 12th meeting of the Standing Committee of the 14th National People's Congress will be held from November 4 to 8, and the announced agenda includes reviewing the report of the State Council on financial work. On the US side, the election results will be announced, and whether the Federal Reserve will further cut interest rates is affecting the nerves of global investors.
The 12th Session of the Standing Committee of the 14th National People's Congress will be held from November 4 to 8
The 32nd Chairman's Meeting of the Standing Committee of the 14th National People's Congress was held in Beijing on the 25th. Chairman Zhao Leji presided over the meeting. The meeting decided that the 12th Meeting of the Standing Committee of the 14th National People's Congress would be held in Beijing from November 4 to 8.
The Chairman's Meeting suggested that the 12th Meeting of the Standing Committee of the 14th National People's Congress consider the draft of the Preschool Education Law, the revised draft of the Law on the Protection of Cultural Relics, the revised draft of the Mineral Resources Law, the draft of the Energy Law, the revised draft of the Anti money Laundering Law, the revised draft of the Supervision Law of the Standing Committees of the People's Congresses at all levels, and so on.
The agenda for the 12th meeting of the Standing Committee proposed by the Chairman's Meeting includes reviewing the report of the State Council on financial work, the comprehensive report on the management of state-owned assets in 2023, and the special report on the management of administrative state-owned assets in 2023.
The upcoming Standing Committee of the National People's Congress is highly anticipated by all parties. Prior to this meeting, the Ministry of Finance announced at a press conference that it would launch a package of incremental policies, including plans to increase the quota for large-scale debt at once to replace the hidden debt of local governments, and to increase support for local debt risk mitigation. The relevant policies will be explained in detail to the society after completing the legal procedures.
After the Ministry of Finance announced its plan to increase the large-scale debt quota at once to replace the existing implicit debt of local governments, many places are actively striving for this implicit debt replacement quota to alleviate the pressure of resolving government debt risks at the local level.
However, the increase of the debt limit needs to be reviewed and approved by the Standing Committee of the National People's Congress. It is expected that relevant matters will be announced at the 12th meeting of the Standing Committee of the 14th National People's Congress, which will be held from November 4 to 8.
The results of the US election will be announced
The highly anticipated 2024 US presidential election is entering its final countdown, and the race between Trump and Harris is also entering a white hot state.
As of October 30th, 53.12 million people have completed their voting through mail and early on-site voting, with the Republican Party having a better early voting situation in swing states than nationwide. CITIC Securities believes that due to differences in early voting rules, information disclosure rules, and voter voting preferences among different states, the indicative significance of early voting data for the final election results is relatively limited.
CITIC Securities also pointed out that it will have to wait for the official election day on November 5th. It is expected that the election results will be basically clear as early as noon on November 6th Beijing time, but if the voting results in some states are too close or delay the release of the results.
According to CCTV News on November 1st, on October 31st local time, Forbes reported that a latest opinion poll showed that Vice President and Democratic presidential candidate Harris is only slightly ahead of former President and Republican presidential candidate Trump by 1%, but 10% of voters may change their minds before the election.
At present, global financial markets are being "nerve wracked" by the upcoming US election, and Chinese investors are no exception. Goldman Sachs strategists have stated that Chinese stocks will rise within two to three months after the US presidential election. However, they also warned that if former President Trump wins, there may be a "subconscious reaction" in the market.
The Federal Reserve will hold its interest rate meeting from November 6th to 7th
On September 18th, the Federal Reserve announced a 50 basis point reduction in the target range for the federal funds rate, to a level between 4.75% and 5.00%. This is the first interest rate cut by the Federal Reserve since March 2020, and also marks a shift from a tightening cycle of monetary policy to an easing cycle.
The Federal Reserve will hold a policy meeting on November 6-7. Traders continue to expect a probability of about 90% for the Federal Reserve to cut interest rates by 25 basis points next week. According to the swap rate, it is expected that the Federal Reserve will cut interest rates by a total of about 117 basis points in the next 12 months, which is about 67 basis points lower than the estimate in early October.
It is worth mentioning that the market was previously concerned that if the non farm payroll report released this Friday is hot, it may overturn the expectation of interest rate cuts. But the latest data shows that the non farm payroll in the United States increased by 12000 people in October, with an estimated increase of 105000 people. The previous value was an increase of 254000 people, which is the lowest monthly employment growth since December 2020.
After the release of non farm payroll data, traders increased their bets on a 25 basis point rate cut by the Federal Reserve in November.