MHMarkets：September 27, 2023--Fundamental Reminder

☆20:30 USD Durable Goods Orders MoM (AUG)

  22:30 USD EIA Crude Oil Stocks Change (SEP/22) & USD EIA Strategic Petroleum Reserves Change (SEP/22)

☆TBD Spain's parliament elects a new prime minister

Market Overview

Review of Global Market Trend

The dollar index maintained its strength on Tuesday, rising further above 106 to another 10-month high, before closing 0.217% higher at 106.19. The yield on the 10-year Treasury note fluctuated high and closed at 4.544%.

Spot gold remained under pressure, briefly falling below the 1,900 mark for the first time since Aug. 23, before settling down 0.78% at $1,900.74 an ounce. Spot silver lost 23 marks and ended down 1.12% at $22.85 an ounce.

International crude oil reversed a V-shape and continued to rally from two-week lows as expectations of tight supply outweighed concerns that an uncertain economic outlook would dampened demand. WTI crude recovered 90 marks to end up 0.75% at $90.51 a barrel; Brent crude settled up 0.61% at $92.44 a barrel.

The three major U.S. stock indexes opened lower, with the Dow Jones Industrial Average down 1.14%, the Nasdaq down 1.5% and the S&P 500 down 1.47%. The Nasdaq China Golden Dragon Index fell 0.8%, while JD.com and Pinduoduo both fell more than 2%. Apple closed down more than 2%, while Amazon, which has been the subject of an antitrust lawsuit, fell nearly 4%. Faraday Future is down another 17% and 37% for the week.

Most major European stock indexes closed lower, with the Stoxx Europe 50 down 0.97%, Germany's DAX30 down 0.97%, France's CAC40 down 0.7% and Britain's FTSE 100 up 0.02%.         

Market Focus

1. Fed's Kashkari: 60% chance of a soft landing and another rate hike needed, 40% chance of much higher interest rates needed to tame inflation.

2. A South Korean court decided not to approve the arrest of Lee Jae-myung, the leader of the largest opposition party.

3. Biden was on hand to support autoworkers' demands for a 40% raise.

4. Us media: OpenAI seeks to sell existing shares at a valuation of up to $90 billion.

5. The Federal Trade Commission and 17 state attorneys general filed antitrust lawsuits against Amazon.

6. Both parties in the US House of Representatives, Republican moderates and Democrats, and both parties in the Senate are advancing their own measures on the government shutdown. With the deadline just five days away, a short-term shutdown is all but inevitable.

7. Overnight market - Spot gold fell below the 1,900 mark for the first time in a month; The yen fell below 149 and Japan's finance minister issued two warnings on yen bears during the day; The franc notched its longest daily losing streak since 1975; All three major U.S. stock indexes fell more than 1%.   

Geopolitical Situation

Institutional Perspective

01

Goldman Sachs

Goldman Sachs：The FTSE 100 is set to get a boost from higher oil prices and a fall in the pound

Rising crude oil prices and a weaker pound will boost the UK large-cap index, according to Goldman Sachs. The FTSE 100 remains “very positively correlated” with oil prices, strategists including Cecilia Mariotti wrote in a note, while the bank's commodity analysts expect crude prices to rise further. The continued march higher for September Brent crude, which approached $95 at one point last week, has made it a relatively good month for the U.K. benchmark, which has beaten most other European stock indexes with a 2.6% gain. The Goldman strategists also said a weaker pound would benefit FTSE 100 stocks, which make about 75% of their sales overseas. The pound is down 3.9% against the dollar this month after easing inflation prompted the Bank of England to refrain from further interest rate increases. “We believe this could become a tailwind for the FTSE 100 given its strong exposure to international markets,” Goldman added.

02

SOCIETE GENERALE

【SOCIETE GENERALE：The pound was subdued as interest rate support faded and the dollar rallied】

Sep 26 - The British pound fell on Tuesday as the dollar rose on higher U.S. Treasury yields and last week's BOE decision to leave interest rates unchanged took the prospect of further rate hikes off the table. “The supportive impact of rates on sterling has been cut,” said Kit Juckes, FX analyst at Socgen Bank, in a note. The British pound hit a six-month low against the dollar on Tuesday and was near a four-month low against the euro. Even if the U.K. economy doesn't perform as badly as markets expect, EUR/GBP could gradually rise to 0.90, Mr. Juckes said.

03

MUFG

【MUFG：The Fed stance could push the yield on the 10-year Treasury to 4.75%】

Sep 26 -George Goncalves, head of U.S. macro strategy at MUFG, said in a note that the Fed's goal of keeping rates at higher levels “for longer” could push the 10-year Treasury yield to 4.75%. The Fed may also be happy to let the bond market do some of the monetary tightening work for them, Goncalves said. Mufg has an upside target of 4.5% for the 10-year Treasury yield in the third quarter, with the potential for “another technical breakout” of 4.75% and possibly 5% as the yield hits that level.