This article comes from the official account "Wind Information" of Wechat.

Just after the end of the year, the capital market will usher in a major event.

Tomorrow, the seventh day of the Lunar New year (February 22), global investors will focus on the following two major events:

Minutes of the Fed's January FOMC meeting announced at 03:00 Beijing time on February 22nd ▼

Minutes of the January meeting of the European Central Bank announced at 20:30 on February 22nd ▼ Beijing time

Federal Reserve to release minutes of FOMC meeting in January

At 3: 00 a.m. on February 22, Beijing time, investors will pay close attention to the minutes of the January monetary policy meeting released by the Federal Reserve, the views of various committee members on the tone of monetary policy, or the focus of market attention.

In its January statement, the Fed predicted that US inflation would rise this year, releasing to the market a hawkish tone of continued gradual interest rate hikes throughout the year. Market participants interpreted this as laying the groundwork for an interest rate hike in March.

CME Fed Watch estimates that the probability of the Fed raising interest rates by 25 basis points to 1.5 per cent in March is 80.3 per cent, and the probability of June reaching that range is 32.7 per cent.

Cleveland Fed President Mestre said last week that the Trump administration's tax cuts have increased upside risks to the US economic outlook, but she believes a gradual increase in interest rates is still the right path. At the same time, she stressed that the recent stock market turmoil will not affect the economic or interest rate outlook.

Dudley, the "number three" of the Federal Reserve and chairman of the New York Federal Reserve, insisted on unwavering expectations of raising interest rates in a recent speech. "it's really too early to predict whether it will be added once, twice, three or four times this year," Dudley said in early February. The median forecast for three rate hikes in 2018, announced after the FOMC meeting in December, still seems to be a very reasonable forecast. " But he also cautioned that the pace could either accelerate or slow, depending on changes in the economic outlook.

Williams, chairman of the San Francisco Fed, also said a few days ago that data released on February 2 showed that hourly wages in the United States increased by 2.9% in January, a considerable increase, confirming the strong performance of the economy. He reiterated that he expects to raise interest rates three to four times this year.

market prediction

Credit Suisse economist James Sweeney said last week that large-scale direct spending by the US government could lead to higher short-term economic growth, prompting the Fed to raise interest rates four times this year instead of three as originally expected.

As the January FOMC meeting was held ahead of "strong wage and CPI growth data and the adoption of fiscal spending plans", Credit Suisse said, "the minutes may not reflect the committee's latest views on economic growth and inflation." Analysts at Credit Suisse expect the first rate hike in 2018 to be announced in the FOMC announcement on March 21, and expect three rate hikes in 2018.

Analysts at Nomura Securities expect the Fed to raise interest rates four times this year. Nomura Securities believes that as the labor market tightens and the economy grows moderately, core inflation is expected to pick up gradually; the Fed is expected to raise interest rates four times in 2018 and twice in 2019, while continuing to shrink the table. The Trump administration's sharply deteriorating fiscal position and "aggressive" trade policies will pose significant risks.

In a recent research paper, Tom Porcelli, an economist at RBC, wrote that the minutes of the FOMC meeting on January 31, released on February 21, were likely to be interpreted as "reinforcing a strong narrative of the inflation situation" because of "market obsession with inflation".

Goldman Sachs Group Asset Management also said that the Fed is likely to raise interest rates four times this year, rather than about three times as widely expected.

Fed officials will speak intensively

In addition to the minutes of the Fed meeting, investors will also focus on the speeches of a large number of Fed officials this week. Under the existing arrangements, eight senior Fed officials may take the stage this week, most of whom have voting members.

Voting committee members who will speak this week include New York Fed President Dudley, Cleveland Fed Chairman Mestre, Atlanta Fed Chairman Bostick, San Francisco Fed Chairman Williams and Fed Financial Regulatory Vice Chairman Quarles, whose comments are expected to have a significant impact on the dollar.

Hackl, president of the Federal Reserve Bank of Philadelphia, will attend the breakfast of Deans of edward jones in St. Louis on February 21, when he will give a speech on the outlook for the US economy.

On the evening of the 21st, Minneapolis Federal Reserve Bank President Neel Kashkari is expected to attend the Minneapolis Fed speech and answer questions from the audience.

On the evening of the 22nd, Raphael Bostic, president of the Federal Reserve Bank of Atlanta, will attend the 2018 banking outlook conference and answer questions from the audience.

On the 23rd, Mestre (Loretta Mester), president of the Cleveland Federal Reserve Bank, will attend a seminar on "Review of Monetary Policy objectives" in New York.

Will the dollar strengthen?

The views of Fed officials on inflation will be focused on by the market. A number of institutions believe that if policymakers think inflation is rising too fast, they will raise interest rates more aggressively. This could push the dollar stronger. Higher interest rates could push investment money away from stocks to the dollar, pushing up borrowing costs for investors and companies, and rising inflation could erode profit margins.

JPMorgan Chase & Co said recently that the dollar is more concerned about the decline of almost any asset than the rise in global stock markets. George Saravelos, a foreign exchange strategist at Deutsche Bank, recently pointed out that US Treasury yields have risen sharply, while the weakness of the dollar is noteworthy.

Across the foreign exchange market, the decline in the dollar is partly related to the transfer of capital flows, according to TD Securities. Indeed, in addition to large current account surpluses, demand for overseas assets in the eurozone and Japan is also rising.

How will US stocks go?

TD Securities believes that a weaker dollar is continuing to be positive for US stocks and the broader emerging markets, as many S & P 500 companies are global and their overseas earnings are driven by depreciation of their currencies. This helps explain the rebound in US and global stock markets.

Alan Alan Ruskin of Deutsche Bank said the weakness of the dollar, combined with tax reform, and stimulus to fiscal growth remained highly supportive of US equities.

What will be the trend of commodities in the later period

The dollar index rebounded from a three-year low on Friday as investors worried that US inflation might accelerate and the Federal Reserve might raise interest rates. The exchange rate of the US dollar was basically stable the other day, and the US dollar rose slightly against major currencies. The industry believes a weaker dollar can boost dollar-denominated commodities because it makes them cheaper for holders of other currencies.

The minutes of the ECB's January meeting will be released on the 22nd.

In addition to the minutes of the Fed's January FOMC meeting, the minutes of the ECB's January meeting are also one of the market's priorities.

The ECB will release the minutes of its January meeting at 20:30 Beijing time. This summary may further explain the time before the end of the QE. Coeure, executive member of the ECB, had previously pointed out that the ECB would discuss policy rhetoric "at the beginning of 2018". Visco, the ECB's governing board, has previously said the ECB will be patient in meeting its inflation target.

The minutes of the December meeting released by the ECB last week said the ECB might consider gradually adjusting its guidance from the beginning of 2018. The ECB sees some positive signs in wage developments, but inflation remains a concern. The ECB agrees that communication must change if the reflation trend continues.

CITIC Mingming's research team pointed out in a research report on January 16 that as an indicator of the ECB's greatest concern, the relative downturn in inflation may hinder the process of starting a "forward-looking guide for gradual adjustment." it is unlikely that the euro area will start raising interest rates and shrinking tables in the near future, and it is not expected to have an impact on China. For now, the agency maintains its expectation that 10-year Treasury yields will fluctuate in a range of 3.8% to 4.0%. (editor: Xiao Shunlan)