Mohicans markets：MHM Today’s News

November 23, 2022-Fundamental Reminder

☆ 09:00 New Zealand Federal Reserve announces interest rate resolution and policy statement.

☆ 17:00 Eurozone releases preliminary of manufacturing PMI for November.

☆ 21:30 U.S. releases initial jobless claims for the week ending Nov. 19.

☆ 22:45 U.S. releases preliminary Markit manufacturing and services PMI for November.

☆ 23:00 U.S. releases final value of University of Michigan consumer confidence index for November, one-year inflation expectations for November, and U.S. annualized quantity of new home sales for October.

☆ 23:00 UK Chancellor of the Exchequer David Hunt answers questions on the budget.

☆ 23:30 U.S. releases EIA crude oil inventories and strategic petroleum reserve stocks for the week to Nov. 18. The U.S. API crude oil inventories released this morning for the week to November 18 fell by 4.819 million barrels, compared with an expected decline of 2.248 million barrels.

☆ The following day at 03:00 the Federal Reserve FOMC releases the November monetary policy meeting minutes.

Market Overview

Review of Global Market Trend

On Tuesday, November 23, the dollar and U.S. Treasury yields were subdued amid a lack of major data or events. The dollar index closed down 0.57% at 107.16, ending a three-day upward trend.

U.S. bond yields fell collectively, the long-end U.S. bond yields fell more; 10-year U.S. bond yields fell to 3.75%, 2-year U.S. bond yields rose slightly to 4.52%, the 30-year long bond yields fell nearly 9 basis points to 3.82%. 2-year and 10-year U.S. bond yield curve inversion deepened, once set a new record low of more than -76 basis points, highlighting market concerns about the coming recession.

Despite the decline in the dollar and U.S. bond yields, spot gold did not really benefit, approaching the $1,750 mark during the day before falling back to near $1,736, closing barely up 0.1% at $1,740 per ounce; spot silver again broke through the $21 mark, closing up 1.1% at $21.08 per ounce.

Crude oil rose more than 2% intraday, narrowing gains at the end of the U.S. WTI crude rose as high as $82.34 a barrel, closing up 1.06% at $81.10 a barrel; Brent crude once forced the $90 mark, closing up 0.88% at $88.38 a barrel. European natural gas rose more than 7%, with the European oil and gas index hitting its biggest one-day gain since November 2020.

U.S. stocks opened lower and maintained gains in late trading, the Dow closed up 1.18%, the Nasdaq closed up 1.36%, the S&P 500 index closed up 1.36%, most of the star technology stocks closed higher, Nvidia rose more than 4%, TSMC, Intel rose 3%, Apple closed up 1.5%. The S&P 500 index closed above the 4,000-point mark for the first time since September.

European stocks generally closed up, Germany DAX30 index closed up 0.29%, the British FTSE 100 index closed up 1.03%, France CAC40 index closed up 0.35%, the European Stoxx 50 index closed up 0.53%, Spain IBEX35 index closed up 1.68%, Italy FTSE MIB index closed up 0.96%.

Hot Spots in the Market

1. The EU plans to relax Russia's oil price ceiling plan, giving a 45 day grace period and relaxing shipping terms; The oil price ceiling may be set at about $60, which should be announced as early as Wednesday evening. The US Treasury said that violating the Russian oil ceiling would face civil or criminal penalties.

2. Special Envoy of the United States for Energy Security: When the oil price is within the range of $70, he will seek to immediately replenish the war reserves.

3. Thirty percent of American freight transport may be suspended, and the railway union proposes to strike on December 9. The British Railway Union announced that it would hold several strikes involving more than 40000 people.

4. OECD predicts that the global economic growth will slow down from 3.1% in 2022 to 2.2% in 2023.

5. The European Commission will raise the upper limit of the benchmark natural gas price to 275 euros/megawatt hour, and the proposal for the upper limit of the price still needs to be approved by the European Union governments.

6. Federal Reserve official George: The level of savings will be a key factor in the economic outlook, and wage growth is crucial to tracking inflation.

Geopolitical situation

Conflict situation:

1. The Russian Ministry of Defense reported on the 22nd that the Russian army was attacking many targets such as foreign mercenaries in the eastern front. In addition, the Russian army also destroyed a set of American made M777 howitzers in the Kharkov area.

2. Ukrainian officials said on the 22nd that on the evening of the 21st, the Russian army fired nearly 60 shells at Nicopol on the opposite side of the Zapolo nuclear power plant, causing no casualties.

3. Ukrainian power grid operator: few of our thermal power stations and hydropower stations are undamaged, and the damage caused by the Russian attack is “huge”. The current generation capacity of Ukraine cannot meet the demand of consumers.

4. The Russian Ministry of Defense reported on the 22nd that on the 21st, the Ukrainian army fired 8 large caliber shells from Marganez to the Zapolo Thermal Nuclear Power Plant, but the Russian army counterattacked. At present, the radiation of the nuclear power plant is normal.

Energy situation:

1. The draft shows that the EU plans to relax the restrictions, increase the grace period of 45 days and relax the shipping terms before the approval of the Russian oil price ceiling plan. It is reported that the oil price ceiling may be set at about $60/barrel, which could be announced as early as Wednesday evening. The US Treasury said that violating the Russian oil ceiling would face civil or criminal penalties.

2. Russia Gas said that Ukraine may withhold the natural gas supplied to Moldova, and said that if the imbalance of natural gas passing through Moldova through Ukraine continues to exist, it will start to reduce the supply of natural gas to the Suza gas metering station at 10:00 on November 28.

3. Ukrainian power grid operator: Ukraine has sufficient fuel reserves; Provision must be made for a prolonged power outage that may exceed 4 hours.

4. European Commission: The upper limit of the benchmark natural gas price will be raised to 275 euros/MWh (the European benchmark natural gas price is currently around 120 euros/MWh), and the proposal of the price upper limit still needs to be approved by European governments.

5. According to Tass: According to the Russian Oil Transportation Company, Belarus requires Russia to increase the oil transit fee by 39%.

Institutional perspective

1. Goldman Sachs：It is expected that the yield of 10-year US treasury bonds will rise to 4% or higher by 2024

2. SOCIETE GENERALE：GBP has become the most unpopular currency, which may provide an opportunity to buy GBP

3. MUFG：The dollar fell after Fed officials made cautious remarks

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