SignalPlus Macroeconomic Analysis (20240326): The macroeconomic situation is unclear, and risk sentiment remains high

This week, trading activity in the market slowed down due to the holiday, with trading volume around 70-80% of normal levels. Recent focus has mostly been on the foreign exchange market, particularly the Chinese yuan and the Japanese yen, both of which have started to weaken following recent meetings of the People's Bank of China and the Bank of Japan.

The volatility of both currencies has increased, especially for the yuan/offshore yuan, as traders prepare for potential further easing policies from China. The market will pay particular attention to levels around 7.30, which aligns with the peaks seen over the past six months.

In the U.S. market, Atlanta Fed's Bostic reiterated his hawkish stance, stating that he expects only one rate cut this year, and that the Fed can afford to be patient as long as the economy remains stable. Meanwhile, Governor Waller's speech on Wednesday may be the highlight of the week, as Powell's speech on Friday will occur during the U.S. market's closure. A quick recap: Waller has indicated since February that there is "no rush" for rate cuts, and further reiteration of this view may raise questions about whether Powell is beginning to lose consensus on his dovish stance.

In the stock market, the recent rally has brought the SPX index to many of Wall Street's year-end target prices, prompting strategists to rush to update their forecasts. With upward revisions to EPS, forward P/E multiples have also expanded. Moving forward, unless CPI significantly exceeds expectations, the economy suddenly collapses, or the Fed shifts to a hawkish stance in the coming months, risk sentiment is likely to remain high.