Mai hui MHmarkets: July 18, 2023 - Fundamental Reminder

☆ 09:30 AUD RBA Meeting Minutes (JUL)

☆ 20:30 CAD Inflation Rate MoM (JUN) & USD Retail Sales MoM (JUN)

The previous value was 0.3%, with an expected growth of 0.5%.

☆ 21:15 USD Industrial Production MoM (JUN)

☆ 22:00 USD NAHB Housing Market Index (JUL) & USD Business Inventories MoM (MAY)

☆ The following day at 04:30 USD API Crude Oil Stock Change (JUL/14)

Market Overview

Review of Global Market Trend

The New York Fed's manufacturing index, released on Monday, fell to 1.1%, indicating that growth in its manufacturing sector has almost stalled. The dollar index closed down 0.04% at 99.91 as markets await U.S. retail sales data for June to be released tonight.

U.S. bond yields in the U.S. stock market early in the session turned up, as the market bets on the establishment of the downward trend of inflation, the U.S. is expected to avoid a “hard landing”, the long end of the U.S. bond yields rose more than 10 years ago U.S. bond yields rose to 3.83%, closed at 3.81% near the two-year U.S. bond yields volatility is not large, the day from 4.77% slightly down to 4.74%.

Spot gold was once under pressure as the dollar index and U.S. bond yields turned higher, dropping nearly $10 and losing the $1,950 mark during the session, before closing back above the mark, closing slightly lower by 0.02% at $1,954.98 per ounce. Spot silver closed down 0.38% at $24.84 per ounce.

Crude oil due to Reuters breaking news that Saudi Arabia “will voluntarily extend production cuts to the end of December 2024” and soared, WTI crude oil rose to $76 per barrel, Brent crude oil once back to $80 per barrel mark, and then retracted due to the false news announced all the gains, WTI crude oil closed down 1.53% at $74.08 per barrel, Brent crude closed down 1.47% at $78.37 per barrel.

The three major U.S. stock indexes were steady to the upside throughout the day, with the Dow closing up 0.22%, the Nasdaq up 0.93%, and the S&P 500 up 0.36%. Tesla, which will report Q2 earnings this week, closed up more than 3%, stabilizing its $900 billion market capitalization. On the trillion-dollar market capitalization team, Apple closed up 1.7%, Nvidia gained 2%, and Google and Microsoft closed slightly lower. The Nasdaq China Gold Dragon Index closed down 0.17%.

European stocks mostly closed lower, with Germany's DAX 30 closing down 0.19%, Britain's FTSE 100 closing down 0.36%, and Europe's Stoxx 50 closing down 0.95%.

Market Focus

1. The Black Sea Food Agreementcomes to an end after almost a year of implementation.

2. The U.S. will send more F-35 and F-16 fighters and warships to the Middle East.

3. Crimean Bridge was attacked again, Russia says U.S. carried out terrorist attack.

4. Sources said that the OPEC+JMMC meeting is scheduled to be held on August 3rd.

5. US Media: Tesla plans to double German factory capacity to 1 million vehicles per year.

6. Russia is said to raise tariffs on oil exports to $16.9 per ton on August 1st.

7. U.S. Treasury Secretary Yellen said we are close to reaching an agreement on the world's lowest corporate tax rate system.

8. Goldman Sachs believes that July will be the last Fed rate hike of the current round, and expects the probability of a U.S. recession in the next 12 months to be 20%.

9. On the afternoon of Beijing time on the 17th, Reuters reported that “the Saudi Ministry of Energy has announced the extension of voluntary production reduction measures until the end of 2024”, but later withdrew the report, indicating that this news is the old news of the extension of the overall production reduction agreement reached at the OPEC+Conference in June.

Geopolitical Situation

Conflict Situation

1. The General staff of Ukraine's armed forces reported the loss of 620 Russian troops over the past day, along with equipment including eight tanks, 23 artillery systems and eight tactical drones.

2. Ukraine's deputy defense minister said Ukrainian forces recaptured seven square kilometers of territory in the direction of Bakhmout last week.

3. Ukraine's deputy defense minister said the situation for Ukraine's armed forces was dire and that Russian troops had been actively advancing in the direction of Kupiansk in Kharkiv region since the weekend.

Crimean Bridge was Attacked:

1. According to the Interfax news agency, Russia's anti-terrorism committee said that a bridge in Crimea was attacked by two Ukrainian maritime drones. A section of the bridge was damaged and two adults were killed. Traffic on the bridge was briefly halted.

2. According to Russian media, all structures of the Crimean bridge are still supported. Part of Crimea bridge road traffic resumed. Russian Deputy Prime Minister: The plan is to open two-way traffic on one side of the Crimean bridge on September 15, and the plan is to open two-way traffic on the other side in November.

4. Russian Investigative Committee: A criminal investigation has been launched into the Crimean bridge incident. Vladimir Putin: The attack on the Crimean bridge is a senseless crime and Russia will respond.

5. Russian Foreign Ministry spokesman: Crimean bridge attacked by Kyiv regime 'terrorists'; Ukraine made its decisions with the participation of special agencies and politicians from the US and the UK.

6. According to the Kyiv Independent: Natalia Humeniuk, a spokesperson for the Ukrainian Army's Southern Operational Command, said that the Crimean bridge explosion may have been a “planned provocation” by Russia because of its unwillingness to continue with the Black Sea Food Initiative.

FoodSituation

1. The Russian Ministry of Foreign Affairs: The implementation of the agreement on agricultural products in the Black Sea ports will be stopped on July 18. At that time, the Russian side will withdraw the guarantee of navigation safety and close the maritime humanitarian corridor in the northwest waters of the Black Sea.

2. Kremlin: Russia will rejoin the food deal as soon as Russia's conditions are met.

3. Russia's RusGrain union says the country's grain exporters will meet all contractual obligations.

4. White House: Urges Russia to immediately reverse its decision to withdraw from the food deal; A blockade after Russia suspends the agreement is not being considered.

5. Zelensky: Ukraine is willing to continue the agreement on agricultural shipments out of Black Sea ports without Russia; On the phone with UN Secretary-General Antonio Guterres, the two sides agreed to work together to ensure food outbound transportation and food security in the Black Sea.

Institutional Perspective

01

Goldman Sachs

Goldman Sachs sees July as the last Fed rate hike of the current cycle and puts the probability of a US recession in the next 12 months at 20%.

02

SOCIETE GENERALE

Societe Generale: For EURUSD to move back above 1.10, the USD CPI MoM may need to fall to 0.2%.

03

MUFG

MUFG: Non-farm payrolls data won't make Fed more hawkish in the second half of the year.