MHMarkets ：MHM Today News

☆ Today, OPEC will release its monthly oil market report, and investors can pay attention to OPEC's view on the recent oil market and the outlook for the future market.

☆ At 7:50, the Bank of Japan will release a summary of the views of the members deliberating on the April monetary policy meeting.

☆ At 19:00, the Bank of England will announce its interest rate resolution, and the market currently expects the Bank of England to raise interest rates by 25 bps. At 19:30, Bank of England Governor Bailey will hold a press conference.

☆ 20:30, the United States will be announced to May 6 when the week's unemployment claims; the market is expected to initial jobless claims will rise slightly to 245,000 compared to the previous 242,000. At the same time, the U.S. will also publish the annual rate and monthly rate of April PPI, the market is expected to slow down its annual rate of 2.4% compared with the previous month, the monthly rate rose to 0.3%.

☆ At 22:15, Fed Governor Waller will speak on financial stability and climate change, so watch out for his comments on the CPI data released yesterday.

☆ The meeting of G7 finance ministers and central bank governors will be held today.

☆The Shanghai Stock Exchange (SSE) is going to hold an exchange conference on “Discovering the investment value of central enterprises and promoting the return of central enterprises' valuation” today.

Market Overview

Review of Global Market Trend

On Wednesday, spot gold shocked downward, after the release of April CPI data, gold short sharply pulled more than $15, and once approached the $2050 mark. Perhaps because the core CPI remains stubborn, the market optimism that the Fed will cut interest rates this year has faded, gold then retracted all the gains due to CPI data, and once fell below the $2030 mark; and then some recovery, and finally closed down 0.2% at $2030.37 per ounce. Spot silver closed down 0.8% at $25.39 per ounce.

The dollar index plunged nearly 60 points in the short term due to a slightly larger-than-expected slowdown in April headline CPI, but then recovered nearly half of its lost ground to close down 0.21% at 101.43. The two-year U.S. bond yield once fell below 3.9% to close at 3.910%; the 10-year U.S. bond yield fell to near 3.4% to close at 3.439%.

Crude oil slipped on Wednesday due to an unexpected increase in EIA data and stubborn inflation data. WTI crude oil shocked to the downside, falling to a low of $71.79 during the day and eventually closing down 1.02% at $72.74 per barrel; Brent crude oil dipped after rising above $77.50, eventually closing down 0.92% at $76.52 per barrel.

The U.S. Dow closed down 0.09%, the Nasdaq closed up 1.04%, and the S&P 500 closed up 0.45%. Google A-share (GOOGL.O) closed up about 4%; LI.O closed up about 14% after earnings, hitting a new closing high since August last year.

European stocks closed lower across the board, Germany's DAX30 index closed down 0.37%; Britain's FTSE 100 index closed down 0.29%; Europe's Stoxx 50 index closed down 0.38%.

Market Focus

 1. U.S. CPI recorded an annual rate of 4.9% in April, which was the 10th consecutive decline and below market expectations of 5.0%. Nick Timiraos writes: The data reinforces the Fed's plan to suspend interest rate hikes.

2. Debt ceiling-undergoing staff-level consultation, Biden said short-term debt ceiling increase is not the only option to avoid default, and said he does not know the latest status of the current consultation.

3. South Korea media: South Korea plans to officially declare an end to the state of emergency for the COVID-19 today.

4. The IRS filed claims worth $44 billion against FTX and its affiliated entities.

5. The Israeli-Palestinian conflict escalated, the Israeli army said 469 rockets and mortar shells have been fired from the Gaza Strip to Israel, and the Gaza crossing was closed.

6. Google I/O conference announced a large number of products, all bets on AI, its stock price once jumped nearly 5%.

7. It is reported that some ECB officials are starting to think that they may need to raise interest rates in September as well.

8. The foreign ministers of Russia, Turkey, Syria and Iran held talks on comprehensive repair of Turkish-Syrian relations and other issues.

Geopolitical Situation

Conflict Situation：

1. Ukrainian military spokesman: the situation in Bakhmut remains difficult, and the eastern city remains a major Russian target; the Russian brigade near Bakhmut was severely damaged, but not destroyed.

2. Putin signed a decree to call up Russian citizens in the reserve for military training in 2023.

3. Russian Defense Ministry: Russian forces launched offensives in several directions, including Donetsk, Zaporozhye and Kherson; Russian air defense forces shot down one Su-27 fighter and several drones of the Ukrainian Army and intercepted several rockets.

4. Ministry of Defense of Ukraine: The Ukrainian Armed Forces repelled dozens of Russian offensives in the direction of Red Liman and Bakhmut, and carried out strikes against Russian military equipment concentration areas, ammunition and fuel depots, air defense systems and other targets.

MHMarkets

Institutional Perspective

01

Goldman Sachs

【Goldman Sachs predicts gas prices in Europe will climb 200% this winter】

On May 10 -- Goldman Sachs Group predicts that gas prices in Europe will nearly climb 200% this winter compared to current prices. Goldman Sachs predicts that gas prices in Europe could exceed 100 euros per megawatt-hour in the second half of 2023, which is nearly three times the current price of 36 euros. Goldman Sachs natural gas research department head Samantha Dart 9 wrote in a research report, Europe's cold winter weather combined with a decline in household conservation awareness, will quickly tighten the supply of natural gas, enough to drive the winter (gas) prices soared to more than 100 euros.

02

SOCIETE GENERALE

Societe Generale: BoE expected to raise interest rates by 25bp and the pound is expected to be boosted

On May 8 -- Societe Generale economists expect a hawkish 25-bp rate hike from the Bank of England this week, which is expected to provide support for the pound and counter the bearish seasonal trend. After the release of higher-than-expected payrolls and inflation data last month, some members cannot be ruled out from calling for another 50 bps rate hike, thus facing a three-way split. We forecast the BoE to raise rates by 25 bps to 4.50% and assess against some members' call for a 4.5% terminal rate.

03

MUFG

【Mitsubishi UFJ: Dollar has reached long-term highs last year, now entering depreciation】

On May 10 -- The dollar was largely steady during the day, with no major macro news driving the market ahead of key U.S. inflation data. With no progress in debt ceiling negotiations, Mitsubishi UFJ economists expect the dollar to remain weak. We believe a short-term solution makes the most sense at this stage. Suspending the debt ceiling until September 30 would allow for simultaneous (but separate) discussions on the debt ceiling and the budget. A budget agreement on next year could at least be seen in the context of longer-term fiscal policy needed to stabilize the debt in terms of GDP. What remains clear and needs to be addressed is that the debt-to-GDP ratio is trending upward under current legislation and is therefore unsustainable. These issues go beyond even resolving the debt ceiling impasse and reinforce our longer-term view of the dollar, which reached long-term highs last year and has now begun a period of depreciation.