May 30, 2023 - Fundamental Reminder

☆21:00 USD FHFA House Price Index MoM (MAR) & USD S&P/Case-Shiller Home Price YoY 22:00 USD CB Consumer Confidence (MAY)

☆ Domestic oil products open a new round of price adjustment window. It is estimated that this adjustment of the retail price limit of refined oil will be the fourth increase since this year, but because of the small adjustment, the impact on the travel cost of consumers after the implementation of the upward policy is not significant.

Market Overview

Review of Global Market Trend

On Monday, spot gold oscillated in a range of less than $10 due to low holiday liquidity and once approached the $1,950 mark during the day before finally closing down 0.01% at $1,943.6 per ounce. Spot silver also traded sideways, eventually closing down 0.64% at $23.14 per ounce.

The dollar index was close to closing flat, falling back to not far above the 104 handle in Asian trading, but then recovered all of its intraday losses to close at 104.3.

International crude oil as a whole fell before rising, the market was boosted by the U.S. avoiding default but still worried that further Fed rate hikes could dampen energy demand. WTI crude oil closed down 0.29% at $73.02 per barrel; Brent crude oil closed down 0.54% at $77.28 per barrel.     

 European stocks were collectively lower, with Germany's DAX30 index closing down 0.2%; France's CAC40 index closed down 0.21%; Europe's Stoxx 50 index closed down 0.4%.

Market Focus

1. Debt ceiling-Donkey and elephant caucus figures lobbied lawmakers to pass the debt ceiling bill, but opposition and unstated key players still exist.

2. Musk is expected to visit China this week and tour the Shanghai factory, sources said.

3. Putin signed a decree to repeal the Treaty on Conventional Armed Forces in Europe.

4. Greek president announced a second round of parliamentary elections on June 25.

5. Egypt and Turkey agreed to immediately upgrade diplomatic relations and exchange ambassadors.

6. Ship tracking data showed that Saudi Arabia imported 500,000 tons of Russian diesel in May and sold more than 400,000 tons of diesel to Singapore, both records.   

Geopolitical Situation

Sanction Situation

1. The Interior Ministry of the Russian Federation has issued an arrest warrant for U.S. Senator Lindsey Graham. The head of Russia's Investigative Committee, Dmitri Bastrykin, ordered authorities on Monday to file criminal charges against Graham for his anti-Russian comments.

2. Russian media: Foreign investors have withdrawn at least 36 billion dollars in total after selling their businesses in Russia.

3. Poland will ban Russian and Belarusian freight vehicles from entering Poland through the Polish-Belarusian border.

4. Polish President Andrzej Duda: I will sign a bill establishing a commission to investigate Russian influence in Poland.

Energy Situation

1. Sea shipments of Russian Urals crude to Turkey hit a seven-month high in May, according to Reuters data.

2. Saudi Arabia imports record Russian diesel, with Singapore a popular destination for sales, ship tracking data shows.

3. India's imports of Russian crude rose to 1.97 million b/d in May from 1.68 million b/d in April, giving Russia a 38.6 percent market share of India's total imports in May, the second highest monthly volume on record after April 2022, according to data compiled by Rufus Oil Research.

Food Situation

1. Russian Foreign Minister Sergei Lavrov: Under the Black Sea food deal, less than 3 percent of food exports reach the poorest countries. The agreement is in danger of falling apart.

2. Uralchem, Russia: A second shipment of sanctioned Russian fertiliser seized by the EU was shipped to Africa as part of a world food programme.

3. Russian media: The Russian Ministry of Agriculture has no plan to buy grain for the state fund.

4. The Russian Government has set an export quota of 16.3 million tons of fertilizer from June 1 to November 30, 2023.

Institutional Perspective

01

Goldman Sachs

If the US debt ceiling deal is passed by Congress by June 5, the reduction in federal spending is expected to shave just 0.1 per cent off US GDP next year.

02

SOCIETE GENERALE

The BOJ is expected to raise its 10-year yield target range by 50 basis points to 1% at its next meeting.

03

MUFG

Michael Wan, senior currency analyst at Bank of Mitsubishi UFJ, said in a research note that there is still plenty of room for market volatility in the coming days and weeks given that the deal could be voted on in Parliament as early as Wednesday and will be partially opposed.