MHMarkets：March 20, 2024 Economic Highlights

Date: March 20, 2024Economic Highlights (GMT + 8)Wed Mar 203:00pmGBPCPI y/yThu Mar 212:00amUSDFederal Funds RateUSDFOMC Economic ProjectionsUSDFOMC StatementUSDFOMC Press Conference5:45amNZDGDP q/q8:30amAUDEmployment ChangeAUDUnemployment RateMarket OverviewGlobal Market RecapOn Tuesday, due to US economic data indicating persistent inflation, expectations for interest rate cuts were dampened. The US dollar index opened low but went higher, closing up 0.22% at 103.80. The yield on the benchmark 10-year US Treasury note closed at 4.2910%, and the yield on the 2-year US Treasury note, most sensitive to Fed policy rates, closed at 4.6970%.The US dollar against the Japanese yen rose for the sixth consecutive day, breaking the 150 mark and closing up 1.15% at 150.97.Bitcoin fell below the $64,000 mark on Tuesday, closing at $63,948.9; Ethereum fell below the $3,300 mark, closing at $3,297.41.Due to the strengthening of the US dollar index, spot gold fluctuated and fell, testing the $2,150 level multiple times before finally closing down 0.15% at $2,157 per ounce; spot silver closed down 0.50% at $24.91 per ounce.International oil prices reached a multi-month high as the market assessed the impact of an attack on a Russian refinery. WTI crude oil closed up 0.30% at $82.44 a barrel; Brent crude closed up 0.29% at $87.14 a barrel.All three major US stock indices ended higher, with the Dow up 0.83%, the S&P 500 up 0.56%, and the Nasdaq up 0.39%, with the S&P 500 setting a new closing high. Nvidia (NVDA.O) rose 1%. Analysts noted that the much-anticipated AI conference did not announce any surprising major news. Apple (AAPL.O), doubling down on AI, rose 1% for the second consecutive trading day. The Nasdaq China Golden Dragon Index fell 0.59%, with NIO (NIO.N) falling over 6%, and XPeng Motors (XPEV.N) rising 0.7% after earnings.European stocks ended higher across the board, with Germany's DAX30 up 0.31%, the UK's FTSE 100 up 0.20%, and the Euro Stoxx 50 up 0.50%.Hong Kong stocks opened lower and traded weakly throughout the day. The Hang Seng Index opened down 109 points at 16,628, with the decline extending to as much as 245 points to 16,492; the weak trend continued in the afternoon, still under the pressure of the 10-day line. At the close, the Hang Seng Index was down 1.24%, and the Hang Seng Tech Index was down 1.83%, with total trading volume at HK$90.69 billion. On the market, consumer electronics, new energy materials, and electric equipment stocks were strong, while oil and coal stocks performed well; publishing, pharmaceutical outsourcing, and drug stocks saw the largest declines. In terms of individual stocks, Li Auto (02015.HK) and WuXi AppTec (02359.HK) both fell nearly 8%, Tencent Music (00772.HK) fell over 7%, NIO (09866.HK) fell 6%; Xinyi Solar (00968.HK) rose nearly 2.5%, Li Ning (02331.HK) rose nearly 2%, CNOOC (00883.HK), PetroChina (00857.HK), and Haidilao (06862.HK) all rose more than 1%.The A-share market was weak and fluctuated, with the ChiNext performing relatively weakly. At the close, the Shanghai Composite Index was down 0.72%, the Shenzhen Component Index was down 0.58%, and the ChiNext Index was down 1.01%. In terms of sectors, chicken and pork concept stocks saw significant gains, with Xiangjia Shares, AoNong Bio, and Shennong Group hitting the daily limit; CPO concept was active, with Huafeng Technology, Huiyuan Communication, and others hitting the daily limit; high-speed connectors concept fermented, with Zhaolong Interconnect and others hitting the daily limit; satellite navigation, 6G concept, coal, and other sectors led the gains; humanoid robots, flying cars, auto dismantling, brokerage, insurance, diversified finance, and banks were among the top decliners. Over 3,300 stocks fell across both markets, with transaction volumes once again surpassing 1 trillion yuan. 

Market Highlights:· For the first time in 17 years, the Bank of Japan raises interest rates.· Kazuo Ueda: Unable to determine when to reduce the ETF balance sheet.· “Fed's mouthpiece”: The Federal Reserve is divided into two camps.· US lawmakers reach a funding agreement to avoid a government shutdown.· Saudi Arabia plans to invest $40 billion in AI.· Changes in the membership of the People's Bank of China Monetary Policy Committee.· The State Council: Reasonably reduce the negative list for foreign investment access.· Ministry of Education: 24 new majors added to undergraduate courses at regular colleges and universities.

 Institutional Views:1. Bank of America (BofA)The results of the March FOMC meeting and subsequent remarks by Chair Powell are poised to have a notable effect on USD trends. Investors and traders will be particularly attentive to any modifications in the Federal Reserve's projections for rate cuts and its perspective on inflation. Potential alterations in the median dot plot to indicate fewer rate reductions, or maintaining the current projection, are expected to be primary factors influencing immediate USD dynamics. The potential for Powell to surprise the markets emphasizes the critical need to vigilantly follow his statements for clues regarding the Fed's future policy path.2. Credit AgricoleCredit Agricole's assessment of the Reserve Bank of Australia's (RBA) latest policy adjustment points to an increased emphasis on prudence and equilibrium in monetary policy decisions. Their analysis indicates that, contrary to current market anticipations, the RBA may postpone rate reductions until a more comprehensive understanding of the economic and inflation landscape emerges, potentially delaying such actions until the latter part of 2024. This perspective is based on the anticipation of enduring inflationary pressures and forthcoming fiscal stimulus measures, which complicate the immediate case for monetary loosening.3. Goldman SachsGoldman Sachs, ahead of the March FOMC meeting, projects a cautiously optimistic view that rate cuts could commence by mid-year, even in light of stronger recent inflation data. This perspective, alongside adjustments in their forecasts for rate reductions, highlights the intricate equilibrium the Fed aims to maintain between encouraging economic expansion and controlling inflation. The expected direction of Fed policy is poised to profoundly influence financial markets and shape investor strategies in the near future.4. MUFGMUFG views the Bank of Japan's latest policy decision as a critical turn towards higher interest rates and a stronger yen over the medium term, even if the immediate market response seems to contradict this trajectory. While the upcoming FOMC meeting might temporarily drive the USD/JPY pair close to levels where intervention could be considered, the broader ramifications of the BoJ's shift underscore a substantial move that corresponds with predictions of an appreciating yen.5. Morgan StanleyMorgan Stanley's analysis of recent currency trading trends reveals a cautiously optimistic outlook among investors about the direction of the USD, fueled by anticipations surrounding the forthcoming FOMC decision. This widespread stance mirrors the general market mood and strategic preparations for possible policy adjustments by the Federal Reserve, illustrating the complex interplay within the FX markets as significant central bank decisions approach.