MHMarkets：December 20, 2023,--Fundamental Reminder

07:00 USD Fed Goolsbee Speech

15:00 EUR Germany PPI MoM (NOV) & GBP Inflation Rate MoM (NOV)

17:00 EUR Current Account s.a (OCT)

21:30 USD Current Account (Q3)

23:00 USD Existing Home Sales (NOV) & USD CB Consumer Confidence (DEC)

23:30 USD EIA Crude Oil Stocks Change (DEC/15)

The market expects it to decrease by 2.233 million barrels.

At 02:30 the following day CAD BOC Meeting Minutes (DEC)

Market Overview

Review of Global Market Trend

On Tuesday, the U.S. dollar index dived in the U.S. pre-market session and approached the 102 mark for a while, eventually closing down 0.38% at 102.11. U.S. bond yields edged lower, with the 10-year U.S. yield falling to an intraday low of 3.894% during the session before recovering some of the lost ground to close at 3.931%; the two-year U.S. yield, which is more sensitive to the Fed's policy rate, closed at 4.441% .

With the decline in U.S. indices and U.S. bond yields, spot gold in the U.S. trading session sharply upward, and recovered 2030, 2040 mark in succession, the day rose to $2047.01 intraday highs, and ultimately closed up 0.65% at $2040.31 per ounce; spot silver back above the 24 mark, and ultimately closed up 1.05% at $24.05 per ounce.

Because the situation in the Red Sea is increasingly nervous traders, international crude oil to continue the upward trend, and once rose more than 2%. WTI crude oil plate once rose to $74.40 of the day's highs, and ultimately closed up 1.81% at $74.13 per barrel; Brent crude oil plate once close to the $80 mark, and ultimately closed up 1.73% at $79.30 per barrel.

The three major U.S. stock indexes closed collectively, the Dow closed up 0.68%, the S&P 500 index rose 0.59%, the Nasdaq index rose 0.66%, to achieve nine consecutive trading days of gains. Nasdaq China Golden Dragon Index rose 1.8%, NIO.N closed up 5.6%, two-day cumulative rise of 10%, BABA.N rose more than 2%, and JD.O rose 3.6%.

European major stock indexes closed higher across the board. Europe's Stoxx 50 index closed up 0.32%, Germany's DAX 30 index closed up 0.56%, Britain's FTSE 100 index closed up 0.31%.

Market Focus

3. Richmond Fed President Balkin: If there is a good decline in inflation, the Fed will respond. Thinking that inflation is more stubborn than the average Fed official thinks, Atlanta Fed President Bostic reiterated that a rate cut is not imminent, and that there will be two rate cuts in the second half of next year, with an eye on the 3/6 month inflation data.

4. The Bank of Japan kept its benchmark interest rate unchanged along with the YCC, saying that it is important to carefully study foreign exchange and market fluctuations and their impact on the economy and prices. Governor Kazuo Ueda said at a press conference that the likelihood of a rate hike at the next meeting is low and that it is difficult to finalize a plan to exit the negative interest rate policy.

5. Japan increased its holdings of U.S. debt by $11.8 billion in October, while China reduced its holdings by $8.5 billion, the seventh consecutive monthly reduction.

6. The United States announced the purchase of more than 2 million barrels of crude oil for the Strategic Petroleum Reserve at an average price of $74.23.

8. Eurozone CPI recorded -0.6% m/m in November, the biggest drop since January 2020.

Institutional Perspective

01

Bank of America

【Bank of America: the survey shows fund managers' “emotions are racing with the Fed”】

Bank of America's Portfolio Strategy team has released its latest fund manager sentiment survey, which shows that professional investors' “sentiment follows policy”. It is worth mentioning that the survey was completed during the period from December 8 to December 14, which included Powell's historic conference. Participation in this survey of fund managers, in the management of assets amounted to 611 billion U.S. dollars. With the Fed's policy shift, the S&P 500 is on its way to new all-time highs, and the Dow has entered a state of record highs.

02

KPMG

【KPMG: UK economy struggles into 2024 with a bleak outlook】

The UK economy will “stagger” into 2024 with a bleak outlook, KPMG has said. In its latest Global Economic Outlook report, KPMG said that while the UK's economic activity in 2023 has exceeded expectations, the outlook remains weak and the economy is vulnerable to shocks. KPMG said that although inflation has peaked, much of the impact of interest rate rises has yet to be felt and will continue to dampen growth. The UK economy also faces the risk of structural labor supply weakness, which will push up wage costs, KPMG said.

Michal Stelmach, senior UK economist at KPMG, said they expect UK GDP to continue to grow at a modest rate of 0.5% in 2024, before picking up to a stable level of around 1% by 2025.

03

Goldman Sachs

【Goldman Sachs: S&P will hit record highs next year, and Wall Street optimism heats up】

Goldman Sachs expects the S&P 500 to reach 5,100 by the end of next year in its latest report. The new price target represents nearly 8% upside from current levels. And in a preliminary outlook released about a month ago, Goldman expects the S&P 500 to reach 4,700 by the end of next year. Costin said his forecast of 5% year-over-year earnings growth in 2024 may be too pessimistic as the accommodative financial environment should boost economic activity and company profits.