MHMarkets：November 28, 2023--Fundamental Reminder

15:00 EUR Germany GfK Consumer Confidence (DEC)

22:00 22:00 USD FHFA House Price Index MoM (SEP) & 22:00 USD S&P/Case-Shiller Home Price YoY (SEP)

23:00USD CB Consumer Confidence (NOV) & 23:00 USD Richmond Fed Manufacturing Index (NOV)

23:00 Fed Governor James Waller speaks

23:45 Fed Governor Bowman speaks

The next day at 05:30 USD API Crude Oil Stock Change (NOV/24)

MHMarkets Market Overview

Review of Global Market Trend

The dollar index continued to slide on Monday, falling as low as 103.18 before closing down 0.19% at 103.22, on track for its biggest monthly decline in a year. The yield on the 10-year Treasury fell sharply, hitting an intraday low of 4.381% before closing at 4.390%. The yield on the two-year Treasury note, which is more sensitive to the Fed's policy rate, fell to 4.9% before closing at 4.890%.

Spot gold steadied at the $2,000 mark and rose to an intraday high of 2018.23 in Asia before settling up 0.57% at $2014.02 an ounce. Spot silver oscillated above the 24 mark before settling up 1.29% at $24.64 an ounce.

WTI crude oil went on a roller coaster ride, falling to an intraday low of $74.03 in European trading before recovering all its losses and rising to an intraday high of $76.18 in the U.S. before ending down 0.19% at $74.99 a barrel. Brent crude briefly fell below $80, then wavered around that level before ending down 0.14% at $79.99 a barrel.

U.S. stocks traded flat, with the Dow Jones Industrial Average down 0.16%, the Nasdaq down 0.07% and the S&P 500 down 0.2%. The Nasdaq China Golden Dragon Index closed down 1.58%, Douyu (DOYU.O) closed down 8%, and Xpeng Motor (XPEV.N) and LI Auto (LI.O) both fell in the 4% line. iRobot, which dived earlier in the session, closed down 17%, while Nvidia (NVDA.O) closed up 1%.

Major European stock indexes closed lower across the board. Europe's Stoxx 50 index closed down 0.4%, Germany's DAX30 lost 0.39% and Britain's FTSE 100 lost 0.37%.

Market Focus

2. The Panama Canal was difficult to navigate, and Stolt-Nielsen, the world's largest operator of chemical ships, diverted to the Suez Canal.

3. Saudi Arabia sought Opec + output quota cuts, which some members opposed. Opec + will hold the JMMC meeting on November 30 at 21:00 Beijing time, followed by a meeting of the full decision-making Group at 22:00.

4, Kuwait's oil ministry said that Kuwait will abide by Opec's decisions, especially the market quota and oil production.

5. ECB President Lagarde: Headline inflation is likely to rise again in the coming months; May reassess reinvestment policies for emergency bond-buying programs.

6. Bank of Israel Governor: It's too early to cut interest rates given the uncertainty in the economy.

Institutional Perspective

01

Morgan Stanley

【Morgan Stanley：The U.S. housing market is expected to “unfreeze” next year, and the Federal Reserve may start cutting interest rates in June】

Ellen Zentner, chief United States economist at Morgan Stanley, said recently that the fortunes of the U.S. housing market will change next year. Zantner said that by mid-2024, as inflation continues to slow, expectations of lower interest rates will materialize.

She expects the Fed to make its first quarter-point cut in June. Another quarter-point rate cut is due in September. Starting in the fourth quarter of 2024, the Fed could cut rates by the same amount at every meeting, eventually bringing the real rate down to 0.4% by the end of 2025.

02

BarclaysBank

【BarclaysBank：The ECB rate-cutting cycle may not reduce volatility】

“After the current pause, another cycle of interest-rate cuts may not necessarily bring volatility down,” said Barclays strategists led by Charley Chau. While lower interest rates did reduce volatility in the post-GFC rate-cutting cycle, mainly because they were close to the policy lower bound, the current level of interest rates is much higher.

The key determinants of volatility will be the transparency of central bank communication, the uncertainty of inflation forecasts, and the liquidity position of peripheral debt. Given the current data-dependent paths of action of central banks, volatility in commodity and labor markets, as well as quantitative tightening and fiscal pressures, Barclays believes the current level of euro rate volatility looks sustainable over the medium term.

03

Goldman Sachs

【Goldman Sachs：It is not expected that the Fed will pivot quickly, but it will indeed be the way forward】

“I don't think the Fed is going to pivot quickly, but it does have to be the way forward,” said Ashish Shah, chief investment officer for public investments at Goldman Sachs Asset Management. That's because you can see inflation coming down and economic growth decelerating. Next year will be the year of bonds and bonds will do well. You're also going to see a steepening of the yield curve because there's going to be a lot of borrowing happening.