Mohicans markets：MHM Today News

☆ At 20:30, the U.S. will release the number of initial jobless claims for the current week.The market currently expects it to record 200,000, an increase from last week's 198,000.

☆At 22:30, Bullard, 2025 FOMC voting commission and St. Louis Fed President speaks on the U.S. economy and monetary policy. Previously he said that the Fed's interest rate needs to be higher than 5%.

Market Overview

Review of Global Market Trend

On Wednesday, as the less-than-expected March “ADP” data and non-manufacturing PMI data fueled market concerns about an economic slowdown and spurred bets that the Federal Reserve could slow interest rate hikes. Spot gold continued to brush a new high since March last year, which was the highest intraday to $2032.13 per ounce, and then retracted most of the day's gains, finally closing up 0.01% at $2020.82 per ounce; spot silver hovered around $25 during the day, finally closing down 0.21% at $24.94 per ounce.

The U.S. dollar index rebounded and once touched the 102 mark, and eventually closed up 0.32% at 101.88; the U.S. 10-year Treasury yield plunged before the U.S. session and once reached a low of 3.263%, which was the lowest level since September 12 last year, and eventually closed at 3.309%.

Despite a larger-than-expected decline in U.S. crude oil and fuel inventories, the two oils still moved lower. WTI crude oil touched an intraday high of $81.21 before falling sharply and once below the $80 mark, eventually closing down 0.82% at $80.30 per barrel; Brent crude oil closed down 0.46% at $84.80 per barrel.

The U.S. Dow closed slightly higher by 0.24%, while the S&P 500 fell 0.25% and the Nasdaq dropped 1.07%. Tesla weakened for the third consecutive session, closing down 3.6%. Chinese concept stock continued to pull back, with the Nasdaq China Golden Dragon Index closing down 2.7%, Alibaba, Jingdong and Pinduoduo closing down in the 1 to 2% range, IQiyi down 5% and Lufax plunging 10.9%.

Major European stock indices were mixed, with Germany's DAX30 closing down 0.53%, the FTSE 100 closing up 0.37%, France's CAC 40 closing down 0.39% and the Euro Stoxx 50 closing down 0.39%.

Market Focus

1. Putin: Russia US relations are in a profound crisis.

2. Foreign media: The Saudi Foreign Minister and the Iranian Foreign Minister will meet in Beijing on the 6th.

3. The Federal Reserve's Meister does not agree with the market expectations for this year's interest rate cut: interest rates need to be slightly higher and maintained for a period of time, and it is still too early to determine whether they will be raised in May.

4. Saudi Arabia will increase the price of light oil sold to Asia in May by 30 cents per barrel.

5. After the violent conflict at the mosque in Jerusalem, militants in Gaza fired rockets, while Israel launched air strikes in response, causing concerns that the conflict could escalate.

6. The World Trade Organization report predicts that global commodity trade volume will increase by 1.7% in 2023, lower than the average growth rate of 2.6% in the past 12 years.

7. The Federal Reserve of New Zealand unexpectedly raised interest rates by 50 basis points, indicating that inflation is still too high and persistent, and further interest rate hikes are needed.

8. RBA Chairman Lowe stated that suspending interest rate hikes in April does not mean the rate hikes are over, and the committee expects that further tightening of monetary policy may be necessary.

9. The number of ADP jobs in the United States increased by 145,000 in March, weaker than the expected increase of 200,000; The US recorded a trade deficit of -70.5 billion US dollars in February, the largest deficit in six months; The slowdown in PMI growth in the US service industry in March exceeded expectations.

Geopolitical Situation

Conflict situation:

1. Ukraine has a clear negotiation intention: if the counterattack is successful, it is willing to negotiate with Russia on the Crimean issue.

2. On the 5th, the Russian Ministry of Defense released a war report stating that the Russian army launched offensives in multiple directions such as Donetsk, Zaporoze, and Kherson, eliminating Ukrainian armed personnel and destroying 10 armored vehicles and various other Ukrainian military equipment. The Russian air force shot down one MiG-29 fighter plane from Ukraine, and the Russian air defense forces intercepted 13 rockets launched by the Ukrainian “Hamas” multi barrel rocket artillery system and destroyed 22 Ukrainian UAVs.

3. According to the battle report released by the General Staff of the Ukrainian Armed Forces, the Ukrainian army has repelled more than 60 Russian attacks in four directions, including Zinchman and Bakhmut, in the past 24 hours. Ukraine missile and artillery forces attacked three Russian control points, two manpower and equipment concentration areas, two sets of multi barrel rocket artillery systems and other targets. The Ukrainian Air Force also carried out 9 airstrikes on Russian manpower and equipment concentration areas.

4. Ukrainian President Zelensky: The Russian military does not control Bakhmut.

5. The Belarusian air defense forces conducted exercises in the area near the Polish border from April 5th to 7th.

Assistance situation:

1. Poland and Ukraine sign an agreement for the delivery of armored personnel carriers.

2. Japanese Foreign Minister and Ukrainian Foreign Minister hold talks and say they will provide $7.6 billion in aid

3. NATO Secretary General Stoltenberg: We agree to begin developing a multi-year strategic plan for Ukraine to meet NATO standards.

4. Polish President Duda: Four MiG-29 fighter jets have been dispatched to Ukraine, four of which are currently being dispatched, and an additional six are being prepared for dispatch.

5. Ukrainian Ministry of Finance: Ukraine will receive $2.5 billion in US government grants through the World Bank.

6. Polish President: Poland will only transfer 14 MiG-29 fighter jets to Ukraine and keep upgraded planes to NATO standards for itself.

Institutional perspective

01

Goldman Sachs

It is expected that LME aluminum prices will average $4500 per ton in 2024 and reach $5000 per ton in 2025.

02

SOCIETE GENERALE

SOCIETE GENERALE: The financing progress of governments in the Eurozone is faster than the same period last year

On April 3rd, Ninon Bachet, interest rate strategist at Societe Generale in France, stated in a report that the government bonds issued by sovereign countries in the Eurozone so far this year are slightly higher than the same period last year, completing 32% of the expected annual issuance, compared to 30% at the end of the first quarter of 2022. Bachet stated that the Eurozone has issued 410 billion euros of government bonds so far this year, but due to the expected increase in total supply, the remaining issuance this year is about 100 billion euros more than last year. She stated that the bond issuance progress of the four major bond issuers in the Eurozone - France, Germany, Italy, and Spain - is generally consistent with last year. Among the smaller bond issuing countries, Greece, Belgium, and Finland have made progress in their financing plans compared to last year, while other countries such as Portugal, Ireland, and the Netherlands have lagged behind last year.

03

MUFG

MUFJ: If US employment data falls below expectations, the US dollar may fall significantly

On April 5th, MUFJ stated that if Friday's US non farm employment report weakens than expected, the US dollar may fall significantly as it will support increasing evidence that positive labor market demand is starting to weaken. Derek Halpenny, an analyst at Mitsubishi UFJ, stated that the data collection for the employment report was prior to the banking turmoil in March, which could lead to further tightening of credit conditions and a blow to real economic activity. The best performing sector in the US economy is still the labor market, but we may be on the cusp of change. Halpenny said that if the yield of treasury bond further drops due to the cooling of the job market, the dollar may be most affected against G10 core currencies, including the Swiss franc, yen, euro and sterling.