MHMarkets：September 25, 2023--Fundamental Reminder

☆At 13:30, BOJ Governor Kazuo Ueda meets with business leaders and holds a news conference.

☆At 14:30, Huawei holds an all-scene new product launch event in autumn.

☆At 21:00, ECB President Christine Lagarde makes an introductory statement at a hearing of the Economic and Monetary Affairs Committee of the European Parliament

☆At 6:00 the next day, 2023 FOMC voting Committee and Minneapolis Fed President Kashkari speaks.

Market Overview

Review of Global Market Trend

On Friday, the dollar index continued to brush a half-year high, but fell briefly after the PMI data was released. It quickly recovered all those losses to close up 0.19% at 105.58 and record its 10th weekly gain in a row, another nine-year record. The yield on the 10-year Treasury note retreated from its peak, rising above 4.5% for the first time since 2007 before closing at 4.438%.

Spot gold rebounded from a one-week low, flirting with the $1,930 mark before settling up 0.28% at $1,925.43 an ounce. Spot silver rose and fell as a whole, reaching as high as 23.77 before paring gains late in the day to end up 0.68% at $23.56 an ounce.

International crude oil snapped a three-week winning streak as markets continued to gauge the impact of Russia's fuel export ban, but were restrained by profit-taking and demand concerns over the prospect of higher interest rates. WTI crude oil finally settled up 0.85% at $90.29 per barrel; Brent crude settled down 1.07% at $92.19 a barrel.

Us stocks closed down collectively, with the Dow Jones Industrial Average down 0.31%, the Nasdaq Nasdaq down 0.09%, the S&P 500 down 0.23% and the Nasdaq China Golden Dragon Index up 2.87%. Ford ended up 1.97%, GM fell 0.40% and Stellantis gained 0.16% after the UAW said it would expand its strike against GM and Stellantis, while Ford was temporarily exempt from progress in labor talks.

Most major European stock indexes closed lower, with the Stoxx Europe 50 down 0.31%, Germany's DAX30 down 0.09%, France's CAC40 down 0.4% and Britain's FTSE 100 up 0.07%.

Market Focus

1. The U.S. House of Representatives is expected to return Tuesday with a bill to avert a government shutdown, while the Senate could introduce a bipartisan bill to avert a shutdown on Tuesday.

2. France will require the oil industry to sell fuel at cost.

3. UK media: The UK plans to reduce the inheritance tax rate of 40%.

4. Russian Foreign Minister Sergei Lavrov will visit North Korea in October.

5. The leaders of Armenia and Azerbaijan will meet in Granada on 5 October.

6. Indian media: Apple plans to increase its production in India several times to $40 billion.

7. Japan's second round of nuclear contaminated water discharge to the sea is about to start, the total amount is expected to be about 7,800 tons.

8. Niger has imposed a ban on French aircraft, France has recalled its ambassador to Niger and will withdraw its troops from the country by the end of the year.   

Geopolitical Situation

Conflict Situation

1. Russian media: Wehrmacht soldiers captured in Ukraine.

2. Russian Finance Ministry: Russia may inject 1.1 trillion rubles into the emergency reserve fund in 2023 and nearly 4 trillion rubles from 2024 to 2026.

3. Russian media: Russia has become the second largest supplier of fertilizer to Poland.

4. State Nuclear Power Company of Ukraine: The cooling pool water level of Zaporizhzhan Nuclear Power Station has slightly decreased, and the situation is still stable and controlled.

5. The Russian Defense Ministry said Thursday that it destroyed four Ukrainian attack drones over the regions of Belgorod, Kursk and Bryansk.

6. According to the war report released by the Russian Defense Ministry on the 24th, the Russian army repelled several Ukrainian attacks in multiple directions and launched counter-attacks; According to a war report released by the General Staff of Ukraine's armed forces on Monday, Ukrainian rocket launchers and artillery units struck Russian air defense systems and ammunition depots, destroying several Russian artillery pieces.

7. Zelensky: met with Mike Bloomberg and other top US financiers during his US visit to discuss reconstruction and investment in Ukraine.

Institutional Perspective

01

Goldman Sachs

【Former Goldman Sachs president: Fed rate hikes hurt banks more than they help economy】

Former Goldman Sachs President Gary Cohn said he wants the Fed to stop doing that. In the current tightening cycle, one sees regional banks getting hurt almost more than they're helping the U.S. economy. Mr. Cohn said a string of bank failures this year would prompt the Fed to raise capital requirements for large U.S. banks. Recent bank failures were caused by higher interest rates that eroded the value of long-term assets and promoted deposit flight. And because of what happened with the regional banks, now the Fed thinks banks need more capital, so people are going to put more capital into the biggest banks. But they don't really need more money. Mr. Cohn said if he had the chance to sit down with Mr. Powell, he would tell him, “I think you've done enough.”

02

SOCIETE GENERALE

【SOCIETE GENERALE：A rate hike will not be enough to prevent GBP/USD from losing 1.20 in due course】

Sep 21 – Societe generalechief global FX strategist Kit Juckes said a 25 basis point rate hike by the BOE is justified as weak inflation is not enough to offset strong wage growth and tightness in the Labour market. If the BOE does raise rates, the GBP slide may get some relief, but not enough to prevent GBP/USD from falling below 1.20 in due course.

03

MUFG

MUFG：The BOJ is not expected to change its policy stance. Attention will turn to comments from Mr Ueda about the timing of future interest rate rises and the extent of his discomfort with the yen's recent weakness.