Mohicans markets：MHM Today News

December 16, 2022 - Fundamentals Reminder

☆ At 16:30, Germany announced the initial value of manufacturing PMI in December.

☆ At 17:00, the euro area announced the initial value of manufacturing PMI in December.

☆ At 18:00, the euro area announced the monthly rate of CPI in November.

☆ At 22:45, the United States announced the initial PMI of Markit manufacturing industry and Markit service industry in December.

☆ At 02:00 the next day, the United States announced the total number of oil wells in the week from December 16.

☆ At 04:30 the next day, the Commodity Futures Trading Commission of the United States announced its weekly position report.

Market Overview

Review of global market trend

The US retail sales data released on Thursday (December 15) was bleak and the Federal Reserve remained hawkish. The US dollar index rebounded sharply, approaching the 105 mark, closing 0.94% higher at 104.59. Non US currencies generally fell, and the decline of the Australian dollar against the US dollar widened to 2.5%, falling below 0.67; GBP fell below 1.22 against USD; The euro hit a new half year high against the US dollar and fell below 1.07. As of the end of the US stock market, it had fallen by more than 0.65%; The dollar broke through the 108 mark against the yen.

The intraday trend of US bond yield was relatively flat, and the two-year US bond yield fluctuated around 4.24%; The yield of 10-year US Treasuries traded around 3.45%. The yield of German two-year bonds soared 28 basis points, the largest increase since 2008. The yield spread of German two-year and 10-year government bonds expanded to - 32 basis points, the largest upside down since October 1992.

Spot gold fell more than $30, while the European market fell to a daily low of 1773, closing 1.69% lower at $1776.87/ounce, the biggest drop since two months. Spot silver closed 3.57% lower at $23.09/oz.

The tightening signal of the central bank intensified the market's concern about the economic recession. The US and Brent oil fell to more than a week's highs, and both fell by more than 2% during the day. WTI crude oil once fell below US $76/barrel, closing 1.43% lower at US $76.27/barrel; Brent crude oil fell below $81/barrel, closing 1.63% lower at $81.45/barrel. The winter storm continued to hit the northeast of the United States, and natural gas futures once surged more than 9%.

The major stock indexes of the US stock market suffered a heavy fall, and the Dow closed down 2.25%, the largest one-day drop since September 13; The Nasdaq fell 3.23% and the S&P 500 fell 2.48%. Large technology stocks generally fell, with Apple down 4.7% and Intel down nearly 4%. Microsoft fell more than 3%.

The European stock market plunged sharply due to the European Central Bank's hawking, and the closing collective fell sharply. The German DAX30 index closed 3.28% lower, the British FTSE 100 index closed 0.92% lower, the French CAC40 index closed 3.09% lower, the European Stoxx 50 index closed 3.56% lower, the Spanish IBEX35 index closed 1.72% lower, and the Italian FTSE MIB index closed 3.45% lower.

Market Focus

1. U.S. retail sales fell more than expected in November and the Fed's hawkish aftershocks deepened recession fears, with the Dow closing down 760 points, the biggest one-day drop since September.

2. China and Japan reduced their holdings of U.S. debt by $24 billion and $42 billion, respectively, in October, according to U.S. Treasury data.

3. Musk cut his holdings of Tesla stock by at least $3.58 billion this week.

4. Intercontinental Exchange may withdraw from EU gas market due to gas price cap measures.

5. Kremlin: Putin is still expected to enact measures to deal with the gas price cap this week.

6. Panama Canal locks temporarily suspended due to fire outbreak.

7. Europe, Switzerland, UK, Norway, Philippines and Mexico central banks all raised interest rates by 50BP, while Argentina's central bank left rates unchanged at 75%.

Geopolitical Situation

Conflict Situation:

1. Mayor of Kharkiv, Ukraine: explosions were heard in Kharkiv and key infrastructure was attacked.

2. When asked about the possibility of a ceasefire in the New Year, the Ukrainian general said that a full ceasefire will be possible only when all Russian troops have left.

3. Donetsk's representative in the Joint Ceasefire Control and Coordination Center: On Thursday morning, Ukrainian troops fired three NATO shells at the city of Donetsk.

4. The Donetsk side said that the shelling of the city center by the Ukrainian army on Thursday was the largest attack since 2014.

5. Senior official of the General Staff of the Armed Forces of Ukraine: the possibility of Russian troops launching military operations from the territory of Belarus remains low.

6. Commander of Russian strategic missile forces: Russia plans to test-launch eight intercontinental ballistic missiles from Plesetsk, Kapustin Yar missile sites in 2023. Russia's strategic missile forces do not intend to establish new missile facilities and military bases in the near future.

Energy Situation:

1. Gazprom: We are currently working on a gas pipeline to connect the east and west.

2. Intercontinental Exchange warned that it may withdraw from the gas trading market of the Dutch Title Transfer Facility (TTF) if the EU goes ahead with its controversial gas price cap plan.

3. Russian Deputy Prime Minister: Russia intends to increase oil extraction in existing projects in Venezuela, which at the same time approves of continued work by Russian companies in the country.

4. German regulator: gas consumption in Germany is at a critical level in cold weather; overall gas supply situation in Germany remains stable.

5. German Chancellor Scholz and French President Macron both expressed confidence that a gas price cap agreement will be reached by next Monday.

Institutional Perspective

1. Goldman Sachs：The Bank of England will raise interest rates by 50 basis points tonight. Although the pace of rate hikes has slowed down, the Bank of England has a longer path to raise rates.

2. SOCIETE GENERALE：Raised ECB terminal rate estimate to 3.75% from 3%.

3. MUFG：The Fed alone cannot reverse the dollar's bearish trend.

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