Mohicans markets：MHM Today News

December 27, 2022 - Fundamentals Reminder

☆ At 07:30, Japan announced the unemployment rate in November.

☆ At 22:00, the US announced the monthly rate of FHFA house price index in October, and the annual rate of house price index in 20 major cities of S&P/CS in October.

☆ At 23:30, the US released the Dallas Federal Reserve's business activity index in December.

☆ Russia may announce countermeasures against Western sanctions against Russian oil. Russian Deputy Prime Minister Novak said earlier that the production of oil may be reduced by 500000 to 700000 barrels per day at the beginning of 2023.

☆ The Hong Kong Stock Exchange and the Australia UK Canada Exchange will continue to be closed on the 27th due to holidays, and the US will resume trading today.

Market Overview

Resumption of global market trend

On Monday (December 26), affected by the Christmas holiday, the Hong Kong Stock Exchange and the exchanges of major western countries were closed for the holiday, and the trading of Brent crude oil futures contracts under ICE, precious metals under CME, US crude oil and foreign exchange contracts was suspended all day long. The Hong Kong Stock Exchange closed its northbound trading.

Hot Spots in the Market

1. The Hong Kong Stock Exchange and the Australia UK Canada Exchange continued to be closed on the 27th due to holidays, and the United States resumed trading today.

2. Foreign Minister of Ukraine: Ukraine hopes to hold peace talks with Russia at the United Nations by the end of February next year.

3. Christmas cold wave in the United States: As of the 26th, the natural gas production was still 10% lower than the normal level, at least 55 people died, and 17000 flights had been canceled since last Wednesday.

4. Iranian Foreign Ministry: The “dialogue window” for returning to the Iran nuclear agreement remains open; He is willing to continue negotiations with Saudi Arabia until formal relations are restored.

5. MasterCard: During the period from November 1 to December 24, the retail sales data excluding the automobile industry in the United States increased by 7.6% year on year and 8.5% year on year.

6. According to the Vietnamese government, Vietnam's exports are expected to grow by 10.5% in 2022, reaching 371.5 billion US dollars.

7. Tohiko Kuroda, governor of the Bank of Japan, stressed that the latest adjustment of the Bank's bond yield control plan was not to start withdrawing from the monetary easing policy, but to make it operate sustainably and steadily.

8. According to Kyodo News Agency of Japan, Japan's Ministry of Finance raised the coupon rate of 10-year Japanese government bonds issued in January from the current 0.2% to 0.4-0.5%.

Geopolitical Situation

Conflict situation:

1. Foreign Minister of Ukraine: Ukraine hopes to hold peace talks with Russia at the United Nations by the end of February next year.

2. The Russian Foreign Minister responded to the question of Russia Ukraine negotiations: either negotiate according to the Russian requirements or let the Russian army decide.

3. British media: The action of Surovikin, the commander of the Russian Joint Group, reduced the chance for the Ukrainian army to successfully attack in the south.

4. Zelensky: The situation on the front line of East Dunbas is “difficult and painful”; He talked with Indian Prime Minister Modi, announced the “peace plan” and sought India's participation.

5. An explosion occurred at the Russian Engels Air Force Base hundreds of miles from the front line of Ukraine.

6. Russian Ministry of Defense: Russian air defense systems shot down Ukrainian UAVs near the military airport in Saratov region of Russia at low altitude, and three Russian soldiers died because of the fall of Ukrainian UAV debris.

Energy situation:

1. Zelensky: Power shortage persists, and nearly 9 million people in Ukraine have no power available.

2. Russian Deputy Prime Minister Novak said that due to the shortage of natural gas, the price of natural gas in Europe will remain high, and it is impossible to return to the level of $200 to $250 per thousand cubic meters at the beginning of 2021. It is expected that the discount of Rosneft will decrease within four months after the new supply chain is stabilized.

3. According to the New York Times, the operators of the Nord Stream Natural Gas Pipeline began to evaluate the cost of repairing the bombed natural gas pipeline.

4. Power Machines, a Russian power equipment manufacturer, said that the company had completed the assembly and testing of the first domestic high-power gas turbine, aiming to replace imported energy equipment that could not be used due to sanctions.

Institutional Perspective

1. Goldman Sachs：Goldman Sachs has scaled back its plans to develop its own retail banking business. A person familiar with the matter said that for many years, Apple has been asking major U.S. banks to allow its customers to check the balance of their deposit accounts on the company's digital wallet. However, these banks basically refused this request. They worried that if they gave the customer experience to Apple, they could only become the financial channel behind the scenes. According to the report, Goldman Sachs has always been willing to cooperate with the request. As a relative newcomer in the retail banking field, Goldman Sachs has expanded and extended its credit card cooperation with Apple a few years ago. Goldman Sachs is preparing to launch a high-yield savings account for Apple cardholders. Goldman Sachs will also provide some back-end services to enable Apple to provide a “buy first, pay later” plan.

2. SOCIETE GENERALE：With the Bank of Japan stimulating hedging, the yen's surge has just begun.

Bank of France said that Bank of Japan Governor Kuroda announced on Tuesday that he would double the maximum yield of 10-year government bonds. This sudden policy adjustment shocked the market and also increased the pressure of international investors in the country to hedge their foreign assets, which is expected to further push up the yen exchange rate. Juckes, the chief foreign exchange strategist of Societe Generale Bank, said that as Japanese fund managers gradually adapt to the Bank of Japan's tougher stance, the dollar/yen exchange rate may fall to 125 in January next year, and fell more than 3% on Tuesday, which means that the yen will rise 6% more than the current level in the future.

3. MUFG：The pound has room for further weakness against the euro.

Mitsubishi UFJ Financial Group said that there is room for the pound to weaken further against the euro, because the European Central Bank may tighten monetary policy more vigorously than the Bank of England next year. So far, the pound is still the third worst performing currency among G10 currencies. On the other hand, so far this year, the euro has ranked first among G10 currencies, with only the US dollar and Swiss franc performing better than the euro. Considering the conflict between Russia and Ukraine and the current economic recession that the euro zone may fall into, the performance of the euro in G10 currencies can be said to be quite impressive.

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