Mai hui MHmarkets: July 5, 2023 - Fundamental Reminder

☆ 09:45 CNY Caixin Services PMI (JUN)

The expected value is 56.2, and the previous value is 57.1.

☆ 22:00 USD Factory Orders MoM (MAY)

The expected value is 0.8%, and the previous value is 0.4%.

Market Overview

Review of Global Market Trend

On Tuesday, the market traded relatively lightly due to the U.S. Independence Day holiday. Spot gold moved higher for the second consecutive session this week, closing up 0.24% at $1,926 per ounce. Spot silver moved slightly higher, eventually closing up 0.38% at $22.97 per ounce. The U.S. dollar index oscillated narrowly around the 103 handle and closed up 0.136% at 103.12.

International crude rallied as traders digested the latest supply-cutting plans from the two OPEC+ giants. WTI crude hit an intraday high of $71.41 per barrel and closed up 1.24% at $70.89 per barrel; Brent crude closed up 1.55% at $76.02 per barrel, which was a new high since June 22.

U.S. stocks were closed for the day. Major European stock indices closed lower collectively, with Germany's DAX30 closing down 0.26%, the UK's FTSE 100 closing down 0.1% and the Euro Stoxx 50 closing down 0.16%.          

Market Focus

1. British media: Yahoo CEO plans to re-list the company.

2. A total of 3,490 people have been arrested since the start of the nationwide riots in France.

3. Japanese media: Japan considers starting to discharge Fukushima nuclear sewage as early as August.

4. U.S. climate data marked July 3 as the hottest single day on record on Earth.

5. World Meteorological Organization officials declare El Nino recurrence, which may break 2016 extreme heat record.

6. Toyota says it has made a major breakthrough in solid-state battery technology: 10 minutes to run 1200 km on a full charge. 

Geopolitical Situation

Conflict Situation

1. Moscow's mayor said Ukraine had again tried to strike Moscow with drones, causing no casualties.

2. Pervomaysk in Ukraine's Kharkiv region has been shelled by Russia, the local governor said.

3. Dmitry Medvedev, Deputy Chairman of the Security Council of the Russian Federation: In the past week, nearly 10,000 recruits have signed contracts with the Russian armed forces. More than 185,000 people have joined Russia's armed forces so far this year.

Food Situation

1. Russia's Foreign Ministry said there was no basis to renew the Black Sea grain agreement. Russia is making every effort to ensure that all ships involved in the food deal leave the Black Sea before the agreement expires.

2. German Chancellor Scholz: Germany supports Ukrainian grain exports to Ukraine through the European Solidarity Channel.

Energy Situation

1. Russia's sea-based diesel exports rose 13% month on month in June as seasonal maintenance work fell, according to traders and Reuters data.

2. According to TASS: Russian oil pipeline transport company Transneft said that the power outage in Kazakhstan had no impact on oil shipments.

3. The outlook for Gazprom's European revenue has worsened due to weak gas prices, according to analysts and Reuters calculations.

Institutional Perspective

01

Goldman Sachs

Goldman Sachs: Expect 25 basis point rate hike. There is a risk of a pause in the near term, but a premature pause increases the risk that rates will peak higher in the future.

02

SOCIETE GENERALE

Interest rates are expected to remain unchanged, as it is difficult to continue raising rates while inflation is falling. No important adjustments are expected in the policy statement, with the terminal rate expected to be 4.35%.

03

MUFG

MUFG: Weaker U.S. employment and inflation data are needed for the dollar to continue to fall.