Mohicans markets：MHM Today News

March 3, 2023 - Fundamental Reminder

☆ At 9:45, China's Caixin service industry PMI in February was announced, with the previous value of 52.9 and the expected value of 54.5.

☆ At 10 o'clock, the State Council Information Office held a series of thematic press conferences on the “opening remarks of authoritative departments”, and invited Yi Gang, the President of the People's Bank of China, Pan Gongsheng, the Vice President of the People's Bank of China and the Director of the State Administration of Foreign Exchange, and Liu Guoqiang, the Vice President of the People's Bank of China, to introduce the relevant information on “strengthening confidence, upholding integrity and innovation, and serving the high-quality development of the real economy”, and to answer questions from reporters.

☆ At 22:45, the final PMI of Markit service industry in the United States in February was announced, and then at 23:00, the PMI of ISM non-manufacturing industry in the United States in February was announced, with the previous value of 55.2 and the expected value of 54.5.

☆ At 0am the next day, Logan, the FOMC Voting Committee in 2023 and Chairman of the Dallas Federal Reserve, delivered an opening speech at an event; At 4:00, Federal Reserve Governor Bowman delivered a speech; At 5:45, in 2024, the FOMC Voting Committee and the chairman of the Richmond Fed, Balkin, delivered a speech on inflation.

☆ The first session of the 14th National People's Congress will hold a press conference at 12:00 on March 4.

Market Overview

Review of Global Market Trend

On Thursday, the spot gold range fluctuated, briefly falling below the $1830 mark, and finally closing down by 0.04% to $1836.06 per ounce, ending three consecutive daily increase; On the whole, spot silver fell first and then rose, and finally closed down 0.47% at $20.9 per ounce.

The US dollar index started to rebound and ended up 0.575% at 105 points. The yield of US 10-year treasury bond bonds continued to rise above the 4% threshold, and finally ended up 1.64% at 4.062%.

Due to the rising expectation of the European Central Bank to raise interest rates, the yield of treasury bond in the euro area also soared across the board. The yield of German 10-year treasury bond hit 2.77% in the session, the highest since July 2011; German two-year treasury bond yield hit a new high since October 2008; Italian two-year treasury bond bond yield hit a new high since August 2012.

 In terms of crude oil, the two oil are still in a sideways trend. WTI crude oil market rose to 1% at one time, and finally closed up 0.32% at $77.77 per barrel; Brent crude oil once stood at the 85 level, but then fell rapidly and finally closed up 0.04% at $84.66 per barrel.

The three major US stock indexes ended higher, with the Dow Index up 0.02%, the Nasdaq Index up 0.73% and the S&P 500 Index up 0.76%. Popular Chinese stocks generally closed higher, with a close of 10% after the performance of BL BL; Tesla closed down 6%, while Silvergate, a cryptocurrency trading bank, closed down 57% after its main partners cut off business with it after questioning its ability to continue operations in a report.

European stocks are all red. Germany's DAX30 index closed 0.15% higher at 15327.64; The FTSE 100 index rose 0.37% to 7944.04; The European Stoxx 50 index closed 0.59% higher at 4240.59.

Market Focus

1. Fed official's speech - Bostock: The interest rate increase may be suspended in the middle or late summer of this year, reiterating its support for the interest rate increase of 25BP in March, and being open to raising the terminal interest rate; Waller: It may be necessary to raise the terminal interest rate given in December. The strong data in January challenges my previous view; The strength of recent data may be temporary.

2. Singapore has significantly raised the threshold for investment immigration from S $2.5 million to S$10 million.

3. According to TASS: The Russian Central Bank extended the foreign exchange restriction policy to March.

4. The yield of US long-term bonds continued to rise, and the yield of 30-year treasury bond bonds rose above 4%; The interest rate of 30-year fixed mortgage reached a four-week high.

5. Russia, under the sanctions of the European Union, is still planning to increase the export volume of marine diesel in March to a new monthly high.

6. On March 2, US Secretary of State Antony Blinken and Russian Foreign Minister Lavrov held a brief meeting in New Delhi, India, which was the first high-level meeting between Russia and the United States in several months.

7. Blackstone Group defaulted on its commercial real estate mortgage-backed securities (CMBS) of US $562 million; According to the plan of the Sydney Stock Exchange, shareholders approved the buyback of £ 750 million worth of shares from Blackstone.

Geopolitical Situation

Conflict Situation：

1. According to the TASS news agency, the Russian army and the Ukrainian sabotage organization clashed in the Bryansk region of Russia. The Russian Federal Security Agency said that the situation had been effectively controlled by taking measures against the sabotage organization.

2. Putin held an emergency meeting of the Security Council and said that there had been “terrorist acts” in the border area of Russia and the Ukrainian artillery fire was directed at civilians.

3. Adviser to President Zelensky of Ukraine: The report on the attack in the Bryansk region is a “deliberate provocation” by Russia.

4. Russian Deputy Foreign Minister Riyabkov: Ukrainian sabotage organizations failed to enter schools in the Bryansk region, and all educational institutions were not affected.

5. Russia's “Wagner” may have entered the center of Bachmut.

Sanction Situation：

1. Finland began to build a separation wall on the border with Russia.

2. Foreign Minister of the Netherlands: We recently decided to close the consulate in St. Petersburg, Russia.

Energy Situation：

1. The Vice President of the European Commission, Sergeovich, said that 22 EU member countries are interested in the joint purchase of natural gas.

2. Market news: Although Russia is prohibited from exporting diesel to Europe, the country plans to increase the export volume of marine diesel in March to a new monthly high. This indicates that Russia is shifting its oil products to other markets.

3. Traders said that Russia planned to export 1.324 million tons of oil products from Tuposei Port in the Black Sea in March, and 1.331 million tons in February.

Assistance Situation:

1. US Defense Department spokesman Kirby: Biden and German Prime Minister Schultz will discuss the assistance needed by Ukraine on Friday.

2. US officials: The US will announce a new military assistance plan of $400 million to Ukraine on Friday.

Food Situation：

1. Ukrainian government officials said that Ukraine's wheat output may be between 16 million and 18 million tons this year, compared with 2020 million tons last year. They did not believe that it was necessary to restrict the export of wheat in 2023 or 2024.

2. US Secretary of State Antony Blinken: Russia has made slow progress on the food export agreement of Ukraine.

3. Analyst from Kiev School of Economics: Ukraine's agricultural sector suffered direct and indirect losses of nearly 38 billion dollars due to the Russia-Ukraine conflict.

Institutional Perspective

01

Goldman Sachs

It is expected that the aluminum market will face a deficit of 1.7 million tons this year (1.6 million tons previously estimated). It is estimated that the average price of aluminum in 2023 will be $3125 per ton. It is expected that the copper market will face a gap of 287000 tons this year.

02

SOCIETE GENERALE

【Societe Generale: The European Central Bank may raise interest rates further to boost the euro】

Societe Generale said that the European Central Bank may further raise interest rates significantly to curb inflation, thus boosting the euro. Olivier Korber, foreign exchange strategist at Societe Generale, said in a report that the risk of recession in Europe and the tight labor market should maintain the upward risk of core inflation. Economists at the bank still expect the European Central Bank to further tighten its policy significantly. The European Central Bank will suspend interest rate increases only when the economy is on a more sustainable path of inflation. Korber said that due to the cautious attitude of the market, the peak interest rate expectation may be repriced higher.

03

MUFG

Mitsubishi UFJ said that the US dollar would rise further in the next week. We still believe that there is room for further increase in the recent rebound of the US dollar. After breaking the 105.00 mark, the US dollar index DXY will retest the intra-year high of 105.63, and then the 200-day moving average, slightly lower than 106.50.