This Week's Fed Meeting Is for Traders: 3-Minutes MLIV

Bond Market & Yields - Hawkish comments from Schnabel are expected to move bond markets, potentially forcing yields higher [1][2] - The macro backdrop suggests a world overburdened with government debt and fiscal promises, leading to higher yields and potential debt monetization [2][3] - The market anticipates a hawkish stance from the Fed this week, alongside JGB auctions, which could influence short-term dynamics [4] - The relevance of the Fed's dot plot is questioned beyond the short term, particularly with a new Fed chair expected in 2026 [5][7] Trading Opportunities & Market Dynamics - The current market environment is considered favorable for traders due to mispricing and declining participation from macro investors [5][6] - Macro trades are expected to pick up again in January after a decline in liquidity following the Fed meeting [6] China's Economic Outlook - China is reportedly focused on expanding domestic demand [7] - China's export strategy involves shifting focus from the US to Latin America and Europe [8] - The Yuan's depreciation on a trade-weighted basis is at its worst level since 2017, benefiting Chinese exports [9] - A weaker Yuan is expected to support the outperformance of the Chinese stock market, while also posing a concern for the government [10]