March twenty-third, two thousand twenty-five (250317-250323)
I. Global Macro FX & Rates (FOMC + CBs Recap)
The dollar’s strength and lower U.S. Treasury yields were the market’s actual response after this Fed meeting. Although the Fed held steady, it also raised its core inflation forecast and lowered its growth forecast, signaling a combination of stickier inflation and weaker growth. More importantly, QT’s slowdown has materialized; for details, please see:
https://mp.weixin.qq.com/s/kjaoUDQk85Xbr3ji0IZ78g
Other central banks held steady, but divergent signals are beginning to emerge..
BOE was unexpectedly hawkish, holding rates steady and reiterating a gradual easing path ahead. The Monetary Policy Committee vote was 8-1, with only 1 members voting for a 25-basis-point cut. We currently expect the first subsequent cut in 5, while OIS markets are pricing in the first full rate cut in 8.
For further reading: Notes250321 European fiscal spending risks skew toward overreaction
The Swiss National Bank cut rates by 25 basis points to 0.25%, as expected. This may be the final rate cut of this cycle, but Its stance is “more can be done if necessary,” preserving the option of further easing.
The Bank of Japan held steady but was slightly dovish, adding “trade policies of foreign countries” to its list of risk factors. The market had initially expected a more hawkish stance, but this round of remarks clearly aimed to control the pace. We expect the next rate hike in 7, while the market has fully priced in a hike in 9.
Further reading: Notes250319 Bank of Japan meeting: baseline scenario sees a rate hike in 7
The Riksbank held its rate at 2.25% and did not raise its future rate path, indicating that it is not overly concerned about inflation. UBS's Franziska Fischer gives a direct assessment:The Riksbank’s easing cycle is over.
Overall, the pace of the rates and currency mix has begun to diverge after this central-bank week, The Fed has entered a zone of “high inflation but no rate hikes + weak growth but no rush to cut,” with markets moving ahead of policymakers. Japan and Switzerland are keeping a steady pace while preserving policy room; the Bank of England is still leaving itself some leeway as it sacrifices growth to suppress inflation.
Second, First Meaningful Post-FOMC Buying since Nov 2023
According to the model readings from UBS, Within 24 hours after this week’s FOMC meeting, it detected +700 hundred million dollars in net buying flows. The trend persisted, with no clear hedging-related selling pressure, so the model classified it as a “meaningful signal.”
In fact, This is also the first meaningful net buying flow after FOMC since 23 11.
Many market participants regard 2023 11 FOMC as an important point in the “Fed pivot,” and this time has a similar structural pattern.At that time, buying after FOMC quickly improved the Intraday Recovery Score. Strong buying near the lows subsequently led the model to turn long-term bullish in 2024 1 and forecast +20% upside over the next year for the S&P 500 index.
Although it is too early to judge whether 3 FOMC will trigger the same path this time, Historically, however, meaningful post-FOMC buying has often been a short-term bullish signal: over the 5 weeks excluding FOMC itself, the S&P 500 rose by an average of +7.0%, with a historical range of +4% to +13%.
Flow comparison after FOMC in 25/3 and 23/11:
After 2025 3 FOMC, Excess Buy Flow was +700 hundred million dollars. This was followed by buying flows of +70 hundred million dollars and selling flows of -70 hundred million dollars, but the overall trend was strongly buying, with no clear hedging.
After 2023 11 FOMC, Excess Buy Flow was +230 hundred million dollars. Before 2 pm the next day, further buying flows of +130 and +90 hundred million dollars appeared, totaling +450 hundred million dollars in net inflows; the trend continued and the structure remained healthy.
Historical review observations:
Meaningful post-FOMC flows are a rare signal: among 58 FOMC meetings since 2018, only 20 (34%) showed “meaningful” flows.
1. Once triggered, the model’s directional forecast hit rate is 89%.
2. The buy-side hit rate is 100%; the S&P rose by an average of +7.0% over 5 weeks.
3. The sell-side hit rate is 80%; the S&P fell by an average of -6.1% over 2 weeks.
The current signal indicates that structural buying flows are established; in the short term, the market is inclined to continue pricing in bullish FOMC sentiment, and SPX has a statistical basis for a trend-following move higher. Whether this develops into the year’s second medium-term turning-point signal remains to be confirmed by flow over the next 2 weeks.
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Note: All content herein is for reference only and does not constitute investment advice or serve as a basis for any laws, regulations, or regulatory policies. Investors should not use or rely on this information as a basis for their decisions.