MHMarkets：November 29, 2023--Fundamental Reminder

09:00 NZD Fed Interest Rate Decision (NOV/29)

Markets expect it to keep rates on hold.

21:30 USD GDP Growth Rate QoQ 2nd Est (Q3)

The market expects it to rise to 5%.

23:05 BOE Governor Bailey speaks.

23:30 USD EIA Crude Oil Stocks Change (NOV/24)

The market expects a decrease of 2 million barrels

The next day at 02:45 Fed Mester delivers keynote speech

The next day at03:00 The Fed releases its Beige Book of economic conditions

MHMarkets Market Overview

Review of Global Market Trend

The dollar index continued its slide on Tuesday, losing 103 and falling to an intra-day low of 102.61, a three-month low, before ending down 0.44% at 102.73, where it has now closed in negative territory for four consecutive days. The yield on the 10-year Treasury note failed to hold above the 4.4% mark, ending at 4.324%. The yield on the two-year Treasury note, which is more sensitive to the Fed's policy rate, fell 4.8% to close at 4.742%.

Helped by the dollar's retreat and expectations that the Federal Reserve has completed interest rate hikes, spot gold rose sharply, successively breaking through the 2020 and 2030 marks, and rose to an intraday high of 2042.17 in the US session, continuing to brush the new high since May this year, finally closing up 1.33% at $2040.81 / ounce. Spot silver rose along with gold and was back near the $25 mark before settling up 1.55% at $25.05 an ounce.

Oil rebounded, with WTI crude rising more than 2% to an intraday high of $76.97 before easing to end up 2.03% at $76.51 a barrel. Brent crude briefly dipped below $80 before rallying to near $81 before closing up 1.75% at $81.39 a barrel.

The three major U.S. stock indexes closed slightly higher, with the Dow Jones Industrial Average up 0.24%, the Nasdaq up 0.29% and the S&P 500 up 0.1%. The Nasdaq China Golden Dragon Index closed down 0.3%. Tesla (TSLA.O), which will deliver Cybertruck this week, rose more than 4%, while Nvidia (NVDA.O) fell nearly 1%. Blockbuster Pinduoduo (PDD.O) jumped 18% to a 31-month high, while Alibaba (BABA.N) fell 1%, narrowing the market value gap between the two to about $10 billion.

Major European stock indexes were mixed. Europe's Stoxx 50 index closed down 0.15%, Germany's DAX30 index rose 0.16% and Britain's FTSE 100 index fell 0.07%.

Market Focus

1. Charlie Munger, chief Vice Chairman of Berkshire Hathaway, has died peacefully in California at the age of 99. Buffett mourned: Berkshire wouldn't be today without him.

2. Fed Governor Waller seemed to “blow the breeze” about a potential rate cut, saying that if inflation continues to fall, a rate cut may be warranted in a few months, and this is not due to economic pressures; New York Fed President Williams also said recent news on the long-term stability of U.S. inflation expectations was largely reassuring; Fed Governor Bowman, who has been hawkish, kept the option open for further rate increases if progress against inflation stalls; Chicago Fed President Goolsbee, a “big dove,” said keeping rates high for too long was a concern

3. Fed Discount Rate Minutes: All local Fed banks voted to keep the discount rate unchanged in October and November.

4. Sources: Opec + talks are progressing difficult and the meeting may be further delayed. Continuation of the current policy is one of the potential possibilities.

5. Kazakhstan's Ministry of Energy: Oil production at the country's largest oil field fell 56% to 39,000 tons per day due to reduced crude oil reception at terminals, and the field will continue to cut production until December 3.

6, the heads of Israel's Mossad intelligence agency and the U.S. CIA met with Qatar's prime minister to consolidate progress on the ceasefire extension, and the meeting will also discuss the next phase of a potential agreement.

Institutional Perspective

01

Deutsche Bank

【Deutsche Bank：If there is a mild and short recession in the US economy, corporate profits will increase by 10%】

Deutsche Bank strategists expect earnings to rise 10% in the event of a mild and short-lived U.S. recession. If U.S. gross domestic GDP grows 2%, profits are expected to rise 19%. “If earnings growth continues to recover as we expect, valuations will continue to be well supported around the top of the range, which is typical for pricing in an earnings growth acceleration,” the Deutsche strategists said. A drop in core inflation to pre-pandemic levels and no slowdown in economic growth could also support the S&P 500, they added.

Deutsche also expects a “mild” US recession in the first half of next year, which would prompt the Fed to cut its policy rate by 175 basis points. It forecasts growth of just 0.6% for the United States next year.

02

Morgan Chase

【Morgan Chase：The RBNZ will hold fire this week】

The Reserve Bank of New Zealand is expected to hold fire Wednesday and leave its official cash rate unchanged at 5.50%, continuing a pause since May, said Ben Jarman, chief economist at jpmorgan.

While markets have been bullish on the prospect of the central bank resuming its rate-hike cycle, the RBNZ appears to believe it has done enough, suggesting the next move in the policy rate will be down. Data since the last monetary policy statement underscores this point. Inflation has fallen below staff forecasts and the job market shows labor shortages have largely abated. Also, inflation expectations have fallen.

03

Bank of America

【Bank of America：The US dollar is expected to weaken in 2024 and the Australian dollar is expected to rebound】

Strategists such as Athanasios Vamvakidis at Bank of America believe the Australian dollar is expected to rebound in 2024 as the Fed cuts rates multiple times. The FOMC is expected to cut rates in 2024 as the Fed's concerns shift from inflation to growth; Other major central banks may also start cutting rates.