Mohicans markets ：MHM Today’s News

October 26, 2022 - Fundamentals Reminder

☆ 22:00 Bank of Canada announces interest rate resolution.

Fxstreets analysis says that if the CBC raises rates by 75 bps, the USDCAD could revert back to 1.3850, while if the members are cautious about the risk of recession and suggest that the pace of future tightening could slow down, the pair could accelerate its gains. In addition, if the CBC indicates it will rely on economic data while raising rates by 75 bps, then this would be seen as dovish.

Global Market Trends Review

On Tuesday, October 25, the dollar index fell below the 111 round figure mark for the first time since October 6; it closed down 0.991% at 110.89, which was a new three-week low. The British pound rose 2% against the dollar at one point and pushed up to the 1.15 handle. The euro rose 1% against the dollar at one point and pushed up to parity for the first time since October 5. The dollar fell below 148 against the yen during the day.

European and U.S. Treasury yields fell sharply. 10-year U.S. bond yields fell to as low as 4.05%, giving back gains since last Thursday.

The dollar and U.S. bond yields both weakened to boost gold prices, spot gold rose above 1660 during the day, closing up 0.31% at $1653.78 per ounce; spot silver closed up 0.43% at $19.34 per ounce.

Crude oil continued to come under pressure as poor global economic data sparked demand concerns; however, as the dollar weakened, oil prices rebounded intraday, with WTI crude closing up 0.05% at $85.81 per barrel; Brent crude closed down 0.44% at $93.42 per barrel.

The three major U.S. stock indexes closed up collectively, with the Dow closing up 1.07% and the Nasdaq and S&P 500 closing initially up 2.25% and 1.63%, respectively.

Most European stocks closed higher, Germany‘s DAX30 index closed up 0.94%, the UK FTSE 100 index closed down 0.01%, France’s CAC40 index closed up 1.94%, the European Stoxx 50 index closed up 1.64%, Spain‘s IBEX35 index closed up 1.57%, Italy’s FTSE MIB index closed up 1.33%.

Market Focus

——Source: jin10 & Bloomberg

1. Richie Sunak accepted the appointment of the British King and officially became the British Prime Minister.

2. EU Energy Ministers will hold an emergency meeting on November 24.

3. The price of natural gas in the Permian Basin fell to a negative value for the first time in nearly two years.

4. Putin: We need to speed up the decision-making on special military operations in Ukraine.

5. The 24th Ministerial Meeting of the Forum of Natural Gas Exporting Countries was held in Cairo on the 25th. The proven natural gas reserves of Forum members account for 72% of the global total reserves, and the export volume of liquefied natural gas accounts for more than half of the global total exports.

6. European Central Bank: European banks expect that the credit standards for corporate loans will be “significantly tightened” in the fourth quarter.

7. LME copper registered warehouse receipts fell to the lowest level since April.

8. According to Politico: The Biden government will announce more sanctions against Iran this week.

9. Musk told the bank that he planned to complete the purchase of Twitter on Friday.

10. The monthly rate of FHFA house price index in the United States in August recorded - 0.7%, the largest decline since March 2011; In August, the annual rate of house price index of 20 major cities in S&P/CS of the United States recorded 13.08%, the smallest increase since February 2021.

Geopolitical situation

——MohicansMarketsETA

Conflict situation:

1. Zelensky: More than one third of Ukraine's energy facilities have been destroyed by rockets and Iranian drones.

2. British military intelligence agency: Since the Russian Ukrainian conflict, at least 23 Russian Ka-52 HOKUM attack helicopters have been confirmed to be destroyed. This accounts for more than 25% of the 90 Ka-52 aircrafts of the Russian Air Force in active service, and nearly half of the total number of helicopters lost by Russia in Ukraine.

3. According to the Ukrainian Pravda, the head of Ukraine's intelligence department said that the Russian army was sending more troops to the key southern city of Kherson and might be ready to defend the city.

4. Russian Ministry of Defense: Russian troops repelled Ukraine's attack in the Kherson region; The Russian air and space army tactical flight team shot down the Ukrainian MiG-29 aircraft in Nikolayev state.  

5. Putin: We need to speed up the decision-making on special military operations in Ukraine.

6. Foreign Minister of Ukraine: We gave up nuclear weapons in 1994 and do not intend to acquire any nuclear weapons.

7. NATO's “firm noon” nuclear deterrence exercise began on October 17 and lasted until 30, with the exercise time partially overlapping with the annual nuclear exercise held by Russia.

8. U.S. Department of Defense: Russia has informed the United States of the upcoming annual military exercises.

9. Russian media: The improved Su-57 of Russia's fifth generation fighter plane successfully achieved its first flight.

(News source: Jinshi Data）

Institutional perspective

1. Goldman Sachs：Reduce the expectation of the interruption of the operation capacity of Russian refineries in 2023 by 2000 barrels per day. It is suggested to continue to take a long position in the EU gasoline market on March 23.

2. SOCIETE GENERALE：Europe and the United States need bad news to maintain the downward trend.

3. MUFG：The dollar is expected to continue to fall.

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