Mohicans markets：MHM Today News

October 17, 2022 - Fundamentals Reminder

☆ At 20:30, the US released the manufacturing index of the New York Federal Reserve in October.

☆ The EU Foreign Ministers' Meeting will be held to discuss further sanctions against Iran.

Market Overview

—— Source: jin10&Bloomberg

On Friday, October 14, the dollar index rose 0.756% to 113.32. British political farce dominated the day's foreign exchange market. After Truss fired kwarten, the pound fell more than 1% against the dollar to below $1.12. After Truss appointed Hunter as the new Chancellor of the exchequer and announced a policy U-turn, the pound fell further against the US dollar, and then recovered some of its lost ground. The dollar rose to 148 against the yen, a new high since August 1990. The yield of 30-year British bonds fell nearly 30 basis points in the day and then rose, once exceeding 30 basis points; The yield of 10-year US Treasuries rose above 4% in consecutive days. On Monday morning, the pound rose against the dollar.

Spot gold fell to US $1639.5/ounce from the lowest above 1670, closing 1.44% lower at US $1641.76/ounce; Spot silver closed at $18, down 3.24% to $18.26/oz.

Crude oil fell sharply in the US session. WTI crude oil fell by 4% at one time and finally closed down by 3.74%, US $85.81/barrel; Brent crude oil closed 3.18% lower at USD 92.31/barrel. European gas fell nearly 8%.

The three major US stock indexes collectively closed lower, with the Dow down 1.34%, the Nasdaq down 3.08% and the S&P 500 down 2.37%. Star technology stocks fell collectively. Tesla fell more than 7%, and its share price fell by half from the peak in early November 2021. On the news side, Tesla's battery production in Germany will be postponed to at least 2024 due to technical problems. The Dow rose 1.18% last week, the Nasdaq fell 3.11% and the S&P 500 fell 1.53%.

European stocks experienced roller coaster fluctuations, and finally ended up collectively. Investors were weighing the impact of the deterioration of the U.S. inflation outlook and the firm hawkish Federal Reserve, as well as considering the consequences of the British government's policy reversal. Germany's DAX30 index rose 0.67%; The FTSE 100 closed 0.12% higher; France's CAC40 index rose 0.90%; Europe's Stoxx 50 index rose 0.57%; Spain's IBEX35 index closed 0.46% higher; Italy's FTSE MIB closed 0.7% higher.

Market Focus

——Source: jin10 & Bloomberg

1、British Chancellor of the Exchequer Quatten announced his departure, Jeremy Hunt was appointed as the new Chancellor of the Exchequer and will release the medium-term fiscal plan on Oct. 31.

2、U.S. retail sales in September recorded a monthly rate of 0%, expected 0.20%, the previous value of 0.30%; Michigan State University survey showed that U.S. 1-year inflation is expected to rise from 4.7% to 5.1%, which is the first time since March, the next five to ten years of inflation is also expected to be higher than economists expected. 

3、The Federal Reserve Daley and Cook said core inflation is still high, the need to continue to raise interest rates, Daley said the maximum level of the federal funds rate may be 4.5%-5%.

4、U.S. President Joe Biden downplayed the risks posed by a stronger dollar to the global economy, instead blaming the rest of the world for sluggish growth and policy mistakes that have dragged down the global economy.

5、Atlanta Fed President Bostic disclosed violations including trading in the quiet period.

6、Director of CDC Rochelle Varensky said the U.S. could see a severe flu season this year; Singapore, for its part, expects the wave of infections caused by the new XBB new crown strain to peak in mid-November.

7、Iranian Foreign Minister and EU High Representative for Foreign Affairs and Security Policy spoke by phone; Iranian Foreign Minister said the steps to reach a nuclear deal are continuing.

8、The Eurozone seasonally adjusted trade account for August recorded -47.3 billion euros, which was the largest trade deficit on record.

9、The European Central Bank management committee Naegele: the European Central Bank needs to raise interest rates a few more times, must not be prematurely relaxed (tightening policy).

10、The Hungarian central bank announced an emergency interest rate hike, the interest rate corridor ceiling from 15.5% to 25%, providing 18% interest rates for one-day deposits, the Hungarian forint soared 2.3% against the euro.

11、Indias coal ministry: India will stop importing power coal in 2024-2025; plans to produce 900 million tons of coal in 2022 and auction 163 coal mines.

12I、Indonesia lowered export tax on gross palm oil to US$3 per ton from Oct. 16-31, setting the reference price of gross palm oil at US$713.89 per ton.

13、It is reported that Credit Suisse is preparing to sell part of its Swiss domestic banking business to try to fill a funding gap of about 4.5 billion Swiss francs.

14、Russian President Vladimir Putin authorized the Central Bank of Russia to issue permits for foreign exchange outbound in excess of the equivalent of $10,000.

15、Russian Foreign Intelligence Service Director Naryshkin said that Russia has information on the sabotage of the Nord Stream pipeline.

16、Russian Deputy Prime Minister Novak: Russias crude oil production will stabilize at 9.9 million barrels per day in November, gas production may fall by 10% in 2022, oil exports will grow by 8% this year, and EU gas prices are not expected to fall.

17、According to Russia's satellite network, NATO nuclear deterrence exercises will be held from October 17 to 30, with 14 countries and up to 60 military aircraft participating.

18、The Spanish government intends to expand spending next year to combat inflation. The Spanish government sent to the EU on the 15th contains two sets of programs of the country's general budget plan for 2023, in response to the high degree of economic uncertainty under the Russian-Ukrainian conflict, the second set of programs is expected to be 10 billion euros of new spending than the first set of programs.

19、Bank of Japan Governor Haruhiko Kuroda: The Bank of Japan is continuing to ease monetary policy, and inflation in Japan is expected to fall below 2% next year.

20、The Bank of Korea Governor Lee Chang-yong: now the market only one-way bets on the Korean won.

21、Baker Hughes said the number of active U.S. oil rigs increased by eight in the latest week to 610, a figure that seems to indicate how quickly the U.S. oil industry reacts to large swings in crude oil prices.

22、U.S. National Security Advisor Sullivan: Biden will consult with Congress on a reassessment of U.S.-Saudi Arabia relations.

Institutional Perspective

——MHMarkets ETA

1. Nomura Securities: the pound will continue to fall against the dollar, fear of falling to 0.975 by the end of the year.

2. HSBC: predicted that the euro against the dollar will fall to 0.9560.

3. IMF: Japan intervened in the yen last month, but the impact will not last a long time.

4. Case Capital Advisors managing partner Kenny Polcari: the Fed may be forced to raise interest rates in December by 75 basis points.

5. BlackRock: The Fed will almost certainly raise rates by 75 basis points in November.

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