MHMarkets：January 30, 2024-Fundamental Reminder

14:30 EUR France GDP Growth Rate YoY Flash (Q4)

17:00 EUR Germany GDP Growth Rate YoY Flash n.s.a (Q4)

17:30 GBP Mortgage Approvals (DEC)

18:00 EUR GDP Growth Rate YoY Flash (Q4)

22:00 USD FHFA House Price Index MoM (NOV)

23:00 USD JOLTs Job Openings (DEC) & USD CB Consumer Confidence (JAN)

Market Overview

Review of Global Market Trend

On Monday, the U.S. dollar index touched a new high during the session since last month's Fed interest rate meeting, but then turned sharply downward, close to retracting all the gains during the day, and finally closed up 0.014% at 103.47; with the U.S. Treasury unexpectedly downgraded the size of the Q1 borrowing is expected to be, U.S. bond yields across the board, long term treasury yields led the decline in the 10-year U.S. bond yields ultimately closed up at 4.076%; The 2-year U.S. bond yields, which is more sensitive to the Fed's policy rate, closed at 4.322%.

Due to the escalation of tensions in the Middle East boosted demand for safe-haven assets, spot gold jumped high after the shock upward, the highest hit 2037.41, and finally closed up 0.71% at $2032.88 per ounce, hitting a new high of nearly a week. Spot silver finally closed up 1.78% at $23.2 per ounce.

International crude oil opened higher and fell off a nearly two-month high, ending a three-day winning streak, as concerns about Asian demand led traders to reassess the risk premium of Middle East tensions.WTI crude closed down 1.5% at $76.88 per barrel, while Brent crude closed down 1.47% at $82.41 per barrel.

Lower U.S. bond yields helped push the three major U.S. stock indexes stronger at the end of the day, with the Dow closing up 0.59%, the S&P 500 up 0.76% and the Nasdaq up 1.1%. NVDA.O closed up 2.3, TSLA.O closed up 4% and PDD.O closed down 8.2%. The Nasdaq China Golden Dragon Index closed down 1%, with BABA.N down 0.6% and JD.O down nearly 1.6%.

Major European stock indices were mixed, with Europe's Stoxx 50 closing up 0.08%, Germany's DAX 30 closing down 0.12%, and Britain's FTSE 100 closing down 0.03%.

Market Focus

1. The U.S. Treasury lowered its estimate of net borrowing from January to March to $760 billion from $816 billion announced at the end of October. Many Wall Street strategists had previously expected a slight upward revision to the borrowing estimate.

2. Iranian Media: Iran denies any connection with the drone strike that killed the U.S. soldier. U.S. Media: U.S. air defense system confused enemy and our target caused the attack on U.S. troops in Jordan. U.S. weighs tough retaliation but avoids expanding conflict.

3. Israel agrees to a 45-day truce in Gaza in exchange for the release of 35 Israeli hostages, Israeli media say. Hamas says Israel must withdraw first. Hamas officials say they seek a “complete ceasefire” rather than a “temporary truce”.

4. Agencies: export data indicate slow action on a new round of production cuts, and OPEC+ is not expected to make any changes to the current agreement at this week's meeting.

5. After Venezuela's supreme court blocked opposition leader from running, White House: reimpose oil sanctions on Venezuela without reinstating candidacy.

6. U.S. DOE purchases a further 3.1 million barrels of oil to backfill the SPR.

7. Acting Head of the Office of the Comptroller of the Currency (OCC): The OCC is proposing new rules to enhance the transparency of the bank merger process.

Institutional Perspective

01

BlackRock

【BlackRock announced that it will upgrade the overall rating of the U.S. stock market from neutral to over rated】

BlackRock announced that it will upgrade the overall rating of the U.S. stock market from neutral to over rated.

02

CITIC Securities

【CITIC Securities: The Fed may slow down the pace of balance sheet reduction around March and end this round of balance sheet reduction in the middle to third quarter of the year】

According to a research report by CITIC Securities, the rapid decline in reverse repurchase balances and the jump in SOFR interest rates in recent times have raised market concerns about the resurgence of 2019 repo market turbulence in the U.S. market. The volatility of the U.S. repo market in 2019 is related to the shift of the Fed's monetary policy framework towards an adequate reserve requirement system after the 2008 financial crisis. The contraction of the balance sheet resulted in lower reserve requirement levels and fluctuations in non reserve liabilities, which were the underlying reasons for the volatility of the repo market. Currently, the overall liquidity of the U.S. market is still abundant, and three liquidity indicators need to be focused on in the future. It is expected that this round of balance sheet reduction will not repeat the turbulence and liquidity crisis in the repurchase market in 2019. The Fed may slow down the pace of balance sheet reduction around March and end this round of balance sheet reduction in the middle to third quarter of the year.

03

ANZ Bank

【ANZ Bank: RBNZ has not yet issued a dovish signal and there is still a possibility of interest rate hikes next month】

Sharon Zollner, Chief Economist of ANZ Bank, stated that RBNZ has not sent a signal of a dovish shift. Paul Conway, Chief Economist of RBNZ, focused on the flow of economic data in his recent speech. He stated that although the situation is moving in the right direction, given that New Zealand's inflation rate is still higher than the Fed's forecast, the fight against inflation is far from over.

Zollner added that ANZ continues to predict that RBNZ will start cutting interest rates from August, but still believes that there is a possibility of a rate hike next month.