Mohicans markets：MHM Today’s News

In order to further meet investors' demand for real-time news on the international market and broaden the channels for investors to understand the market, MHMarkets launched Today News to provide investors with real-time market information.

October 25, 2022 - Fundamentals Reminder

☆ 16:55 Bank of England Chief Economist Peel speaks.

☆ 21:00 U.S. releases monthly rate of FHFA house price index for August and U.S. annual rate of S&P/CS Composite-20 HPI for August.

☆ 22:00 The U.S. publishes the Conference Board Consumer Confidence for October and the U.S. Richmond Fed Manufacturing Index for October.

☆ The next day 01:55 Fed Governor Waller discusses FedNow.

☆ The next day 04:30 U.S. releases API crude oil inventories for the week ending Oct. 21.

Market Overview

——Source: jin10&Bloomberg

On Monday, October 24, the dollar index fell sharply below 112 in Asian trading, then pulled back up to 112.55; the trend in a day was oscillating, eventually closing up 0.125%, narrowly missing 112. The Bank of Japan was suspected of intervening in the currency market again on Monday, and the yen broke through 146 in early trading; but eventually rebounded fruitlessly to 149, again approaching a 32-year low. U.S. bond yields higher again, 2-year U.S. bond yields again exceeded 4.5%, 10-year U.S. bond yields broke 4.29% in a day. Britain ushered in a new prime minister, 2-year and 10-year British bond yields plunged 30 basis points, But the pound briefly rose above 1.14 before turning lower in a choppy session on U.S. stocks and falling below 1.13.

With the dollar and U.S. bond yields moving higher, spot gold moved lower after briefly breaking through 1670 in Asian trading to as low as 1643.85, closing down 0.59% at $1651.56 per ounce; spot silver fell more than 2% during the day, eventually closing down 0.98% at $19.28 per ounce. Crude oil fell more than 2% in a day as poor PMI data from the Eurozone, U.K. and U.S. fueled demand concerns. WTI crude oil eventually closed down 0.53% at $85.82 per barrel, while Brent crude oil closed down 0.15% at $93.91 per barrel.

With recession signals resurfacing, the market is expecting a slowdown in the pace of interest rate hikes, and European and U.S. stocks collectively rebounded to close higher. The U.S. Dow closed up 1.34%, while the Nasdaq and S&P 500 initially closed up 0.86% and 1.19%, respectively. Healthcare and consumer goods sectors were the top gainers.

European stocks generally closed higher, Germany's DAX30 index closed up 1.58%, the FTSE 100 index closed up 0.64%, France's CAC40 index closed up 1.59%, the European Stoxx 50 index closed up 1.47%, Spain's IBEX35 index closed up 1.86%, Italy's FTSE MIB index closed up 1.93%.

Market Focus

——Source: jin10 & Bloomberg

1. Sunak was elected the head of the British Conservative Party. After meeting with King Charles, Sunak will officially become British Prime Minister on Tuesday.

2. Ramsden, deputy governor of the Bank of England, said that the PMI data released on Monday was in line with the forecast that the British economy would fall into recession.

3. U.S. Treasury Secretary Yellen said that the risk of economic recession cannot be ruled out. The United States may face the substantial impact of financial stability risks. The U.S. Treasury is closely watching the possible “risks” in the financial system.

4. According to the data provided by Market ET, it is estimated that the scale of Japan's intervention in the foreign exchange market on October 21 was 5.4 trillion yen to 5.5 trillion yen.

5. A spokesman for the German government said that Germany will start to try out a cap on natural gas prices for consumers in January next year.

6. German Deputy Prime Minister and Economy Minister Habak believes that the natural gas situation in Germany will improve in the winter of 2023-24.

7. Goldman Sachs: In the case of a severe recession in the U.S. economy, the gold price may rise to 2250 dollars/ounce; Under the extreme hawkish situation of the Federal Reserve, the gold price may fall to 1500 dollars/ounce.

8. On Monday, 24 local time, the industry associations of five European enterprises jointly wrote a letter to the European Union urging the European Union and European governments not to impose restrictions on imports such as bans on aluminum products produced in Russia, or thousands of European enterprises may close down.

9. First Deputy Prime Minister of Ukraine: In 2022, Ukraine's GDP growth will shrink by 30%, and the annual inflation rate will reach 30%.

10. Thirty Democratic Congressmen urged Biden to negotiate with Russia on the Russian Ukrainian conflict, marking the first disagreement within the party.

Institutional Perspective

——MHMarkets ETA

1. Deutsche Bank is short of sterling

2. ANZ: If the Bank of England does not achieve a comprehensive interest rate increase, the pound may continue to be sold

3. National Bank of Australia: The Federal Reserve of Australia is ready for the bad news that inflation data has risen sharply

4. Imperial Bank of Canada: GBP test low 1.1058 on October 13

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