Mohicans markets：MHM Today News

March 6, 2023 - Fundamental Reminder

☆ At 18:00, Eurozone January monthly rate of retail sales is released, the expected value of 1%, the previous value of -2.7%.

☆ At 23:00, U.S. January monthly rate of factory orders is announced, the expected value of -1.3%, the previous value of 1.8%.

☆The 14th National People's Congress opened on the morning of March 5 and closed on the morning of March 13, with a session of 8 and a half days.

Market Overview

Review of Global Market Trend

On Friday, spot gold climbed strongly to a two-week high, eventually closing up 1.03% at $1,854.97 per ounce, which was the biggest one-week gain since mid-January; spot silver was also strong, eventually closing up 1.69% at $21.24/oz, its first weekly gain in six weeks.

The U.S. dollar index lost the 105 barrier and rebounded slightly in the U.S. session on positive data, but then continued to pull back, eventually closing down 0.429% at 104.55. The U.S. 10-year Treasury yield fell back to a high level, eventually closing down 2.88% at 3.956%.

In terms of crude oil, the two oils dived nearly 2% at one point due to rumors that the UAE was considering withdrawing from OPEC. But after the news was debunked it turned to pull straight up and recorded a fourth consecutive trading day of gains. WTI crude oil finally closed up 2.49% at $79.75 per barrel; Brent crude oil finally closed up 1.93% at $86.22 per barrel.

Boosted by the drop in U.S. bond yields, U.S. stocks closed higher across the board, with the Dow closing up 1.17%, the Nasdaq closing up 1.97%, and the S&P 500 closing up 1.61%, once again standing at the 4,000-point mark. Large technology stocks performed strongly, Facebook rose more than 6%, Apple, Tesla, Amazon rose more than 3%; popular Chinese stocks were mixed, Azera rose more than 5%, Beeping Beeping up 4%, Futura Holdings fell more than 2%.

European stocks rose collectively. Germany's DAX30 index closed up 1.64% at 15578.39 points; Britain's FTSE 100 index closed up 0.04% at 7947.11 points; Europe's Stoxx 50 index closed up 1.28% at 4294.8 points.

Market Focus

1. The Brazilian government will release data on lithium, rare earth and other strategic minerals to attract investors.

2. Saudi Arabia raised the price of most crude oil sold to Asia and Europe, suggesting that it believed that oil demand would rise.

3. In January, the inventory and sales ratio of Korean chips reached 265.7%, the highest in the past 26 years.

4. EU ban on fuel vehicles: Germany seeks to negotiate with the EU to allow the sale of vehicles using only renewable fuels after 2035.

5. The United States Senate is proposing a bill to prohibit senior executives from holding or trading individual shares.

Geopolitical Situation

1. According to the information released by the representative office of the JCCC, one person was killed and two others injured in the shelling of Yuyevka of the “Luhansk People's Republic” by the Ukrainian army on March 4.

2. American media: two Ukrainian pilots are undergoing fighter training evaluation including F-16 in the United States, and more than 10 Ukrainian pilots will join in the future. Government officials stressed that this was not a training program and said that Ukrainian people would not fly any aircraft during their stay in the United States.

3. The Russian Ministry of Defense said that the Russian Minister of Defense Shoigu had heard the report of the commanders of the various groups on the current situation and the next action plan of the responsibility area of the special operation area.

4. This morning, air raid warnings were sounded in many places in Ukraine.

5. Russia has developed a “night vision” UAV for monitoring oil and gas pipelines.

6. Foreign Minister of Turkey: Turkey is committed to extending the agreement on grain transportation in the Black Sea.

7. Trump: Europe needs Ukraine's victory more than the United States.

8. German Prime Minister Schultz: Western countries are ready to provide Ukraine with certain security guarantees after the end of the conflict, but it is not yet time to do so. Germany will expand its military production for a long time.

Institutional perspective

01

Goldman Sachs

Goldman Sachs: The global penetration rate of electric vehicles will reach 50% by 2025

In recent years, electric vehicles have become an irresistible trend of the times. In the past 2022, the global market share of electric vehicles has increased to 10% for the first time. Goldman Sachs pointed out in its latest report that as the world accelerates the promotion of green and low-carbon development, the penetration of electric vehicles is rising sharply. By 2035, it will reach 50% of the key node, and by 2040, its share will rise to 61%, and the sales of electric vehicles will soar to about 73 million. By 2035, the global penetration rate of electric vehicles will reach 50%, breaking a key milestone.

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

【MUFJ: The European Central Bank QT increases the supply of bonds or poses risks to the euro】

MUFJ said that the quantitative tightening plan of the European Central Bank will increase the supply of sovereign bonds in the market. If inflation is proved to be sticky, it may increase the risk of diversification and put pressure on the euro. Derek Halpenny, an analyst, said that the increased supply could be absorbed by the market, but if there was a problem, it might occur in Italy, which would be shown by the expansion of the yield spread between Italian and German treasury bond, which would have a negative impact on the euro. As long as inflation falls, the supply of high bonds can be met by demand, but if inflation is significantly higher than expected, problems may arise.