Mohicans markets：MHM Today News

February 3 , 2023 - Fundamental Reminder

☆ At 17:00, the Eurozone announced the final value of PMI of service industry in January.

☆ At 18:00, the Eurozone announced the monthly PPI rate in December.

☆ 21:30 The United States announced the unemployment rate in January and the Non-farm payrolls after the quarterly adjustment in January. The non-farm payroll is expected to slow down on Friday. If the average wage data does not rise unexpectedly, the bearish environment for the dollar will not change.

☆ 22:45 The United States announced the final PMI value of Markit service industry in January.

☆ At 23:00, the United States announced the January ISM non-manufacturing PMI.

Market Overview

Review of Global Market Trend

On Thursday, February 2, markets were again dovish in interpreting ECB and BOE decisions. The dollar index rebounded and closed up 0.56% at 101.74. The decline of the euro and the pound accelerated, the euro fell below the 1.10 mark against the dollar, and the pound fell more than 1% against the dollar.

The yield of the US two-year bond fell to 4.032%, which was the lowest level since October 4 last year, and then rebounded. The decline in the yield of euro zone bonds has not stopped. The yield of benchmark 10-year German and British government bonds fell by more than 20 and 30 basis points, respectively, and the yield of Italian government bonds fell by even close to 40 basis points.

Spot gold plunged nearly $40 after the 1960 shock failed, completely erasing all the gains after the announcement of the Federal Reserve's interest rate resolution. It fell below the 1920 mark in the intraday and closed close at the 1910 mark, closing 1.92% lower at $1912.69 per ounce. Spot silver fell below the $24 barrier and closed down 2.11% at $23.47 per ounce.

Crude oil continued its decline, with WTI crude oil closed down 0.94% at $75.94 per barrel; Brent crude oil closed down 0.94% at $82.19 per barrel.

The trend of the three major US stock indexes was divided, with the Dow down 0.12%, the Nasdaq up 3.25% and the S&P 500 up 1.44%. The NASDAQ 100 index rose 20% from the low point in December last year, towards for bullish market. The performance of Meta Platforms increased by more than 23%, and its share price reached the highest level since the beginning of June last year. Amazon and Google closed up more than 7%, fell more than 5% after the after-hours financial report, Apple closed up nearly 4%, and fell more than 5% after the after-hours financial report.

European stocks ended sharply higher, with Germany's DAX30 index up 2.17%, Britain's FTSE 100 index up 0.74%, France's CAC40 index up 1.26%, Europe's Stoxx 50 index up 1.69%, Spain's IBEX35 index up 1.42%, and Italy's FTSE MIB index up 1.46%.

Market Focus

1. Goldman Sachs made more than $3 billion in profits from last year's commodities boom.

2. Russian media: Russia's gold production grows 2.4% in 2022.

3. Bridgewater Dalio: I don't think we'll see the Fed loosen policy and should take Powell's word for it.

4. The U.S. Department of Energy seeks to stop the sale of oil reserves in fiscal year 2023, involving 26 million barrels of oil.

5. The Bank of England raised interest rates again by 50BP to 4.00%, with the market pricing it in for just under another 30BP of rate hikes this year.

6. The ECB raised all three major interest rates by 50 BP and intends to raise another 50 BP in March.

7. The Central Bank of Zimbabwe cut interest rates by 5,000 basis points, lowering the policy rate from 200% to 150%.

8. Adani Group, which lost $100 billion in market value due to the issuance of a short-selling report, said it will revisit its capital markets strategy after capital stabilization.

9. The Nasdaq closed up over 3% overnight led by Meta, while the Dow edged lower. Apple, Amazon, and Google reported poor after-hours earnings/guidance, with Apple revenue recording its first decline since Q1 2019.

Geopolitical Situation

Conflict Situation：

1. Russian Defense Ministry: An offensive is underway in the Donetsk region.

2. U.S. Department of Defense: Kiev does not have and will not have the ability to regain control of Crimea in the near future.

3. Russian Foreign Minister: The U.S. was directly involved in the Nord Stream gas pipeline explosion.

4. U.S. CIA Director Burns: CIA assessment that the next six months are critical for Ukraine.

Assistance Situation：

1. The EU Council adopted the seventh military aid package for Ukraine.

2. U.S. Secretary of Defense: (When asked about Ukraine's request for F16s) We will do everything we can to help them be effective on the battlefield before the upcoming spring counter-offensive.

3. Deputy Finance Minister of Ukraine: Ukraine still has unmet needs and needs another $10 billion from other countries and international organizations.

4. Belgian Defense Minister: No longer considering transferring F-16 fighter jets to Ukraine.

5. Israeli Prime Minister: Consider providing Ukraine with the “Iron Dome” defense system.

Institutional Perspective

01

Goldman Sachs

Oil prices will benefit as colder weather spurs demand. Brent crude oil prices are expected to reach $105 per barrel in the fourth quarter.

02

SOCIETE GENERALE

The ECB is expected to raise rates by 50 basis points in February and March, then slow to 25 basis points, with the policy rate rising to a peak of 3.75% by July. Lagarde is likely to remain hawkish, raising market interest rate expectations.

03

MUFG

The Bank of England is expected to raise interest rates by 50 basis points, and given the increasingly dovish outlook for UK interest rates later this year, the pound could fall if the BOE issues a cautious outlook. (Jin10 Data App)