MHM Today’s News

December 9, 2022-Fundamental Reminder

☆ 09:30 China publishes annual rate of CPI for November.

☆ 21:30 U.S. publishes annual rate and month rate of PPI for November.

☆23:00 U.S. releases one-year inflation rate expectations for December and preliminary of University of Michigan Consumer Confidence Index for December.

☆ The following day 02:00 U.S. releases total number of oil wells drilled for the week to Dec. 9.

☆ Next day 04:30 U.S. Commodity Futures Trading Commission publishes its weekly COT Report. 

MHMarkets -Market Overview

Review of Global Market Trend

On Thursday, December 8, risk sentiment improved as the dollar index weakened and fell below the 105 mark, closing down 0.35% at 104.81. U.S. bond yields rebounded, with the 10-year U.S. bond yield rising by up to 10 basis points and reverting to 3.50% and the 2-year U.S. bond yield rising 7 basis points to 4.32%.

Spot gold broke through the $1790 barrier at the beginning of the U.S. session, but failed to stand firm above the barrier, closing up 0.17% at $1789.09 per ounce; spot silver managed to stand at the $23 barrier, closing up 1.5% at $23.07 per ounce.

Crude oil rose before falling, WTI crude oil quickly pulled up to 75.41 before the U.S. market, then fell sharply, pushing straight to the $71 mark, completely erasing more than 4% of the gains after the closure of the Keystone oil pipeline, finally closing down 0.85% at $71.78 per barrel; Brent crude oil closed down 1.19% at $76.44 per barrel. SC crude fell below the $500 per barrel mark for the first time in nearly a year.

U.S. stocks opened collectively higher, the Dow closed up 0.54%, the Nasdaq, S&P 500 index closed up 1.13% and 0.75% respectively, the S&P 500 index stopped five-day losing streak, the Nasdaq stopped four-day losing streak. Chinese stocks performed strongly, Alibaba, Pinduoduo closed up more than 6%.

Most European stocks closed lower, Germany's DAX30 index closed up 0.02%, the FTSE 100 index closed down 0.22%, France's CAC40 index closed down 0.20%, the European Stoxx 50 index closed down 0.01%, Spain's IBEX35 index closed down 0.79%, Italy's FTSE MIB index closed down 0.17%. 

Hot spots in the market

1. Due to the leakage accident, the Keystone pipeline system with a daily oil throughput of 600000 barrels at the US Canada border was closed, and the market expected to restart for more than one week. The news gave a temporary boost to oil prices, but it was hard to stop the decline.

2. Encourage over-the-counter trading, LME or increase over-the-counter trading fees.

3. Credit Suisse: The sale of securities products will be completed in the first half of next year.

4. U.S. Treasury Secretary Yellen: Economic recession is not inevitable; It will not be disclosed whether the US dollar has peaked against other currencies.

5. The loans of about 450000 Americans in the FHA inclusive housing loan project in the United States have exceeded their housing value.

6. The U.S. House of Representatives has passed a defense spending bill with a scale of nearly 850 billion dollars, which will be submitted to the Senate for voting.

7. The traders cut their bets on the Bank of England's interest rate hike, and it is expected that the cumulative interest rate hike will be less than 100 basis points by February next year. 

Geopolitical situation

Conflict situation:

1. The Kremlin: (Asked about Zerenski's statement that the conflict may end in 2023) If Zerenski hopes, it will end tomorrow.

2. Zelensky: Ukraine is still unable to completely restore its power system.

3. The Russian Ministry of Defense said that the Russian air and space military launched a strike with high-precision weapons, killing more than 90 Polish mercenaries in Kharkov.

Energy situation:

1. The Russian side said that Russia was finalizing the anti oil price ceiling. The impact of the price ceiling on Russian oil will be assessed as soon as possible.

2. Russia and Türkiye will keep in touch with each other on the maritime traffic problems along Türkiye's coast and take measures if necessary.

3. U.S. Department of Finance: Almost all oil tankers delayed in Türkiye waters are not loaded with Russian oil and are not affected by the price ceiling.

4. Yellen: There is no reason to believe that the Russian government participated in Türkiye's decision to prevent ships from crossing the Mediterranean Sea.

5. Six EU countries, including Germany and the Netherlands, have established the red line for the EU natural gas price ceiling.

6. Uzbekistan stopped all natural gas exports.

7. According to Interfax News Agency, the fluctuation of Russian oil production will not be higher than that in spring. 

Institutional perspective 

01

Goldman Sachs 

We have seen optimism in the field of risky assets that US inflation has peaked and interest rates may be cut next year. In the short term, this view is still too early. 

02

SOCIETE GENERALE 

The Bank of Canada is expected to raise interest rates by 50 basis points to 4.25%, which may trigger subconscious buying by the Canadian dollar. At present, the Bank of Canada is wavering between 25 basis points and 50 basis points of interest rate increase, but we suspect that after GDP growth in the third quarter exceeded expectations (partly due to strong exports), the Bank of Canada may choose the latter. 

03

MUFG 

There are two possible negative factors; It may be appropriate to short the US dollar at the end of the year.  

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