Mohicans markets：MHM Today’s News

October 28, 2022 - Fundamentals Reminder

☆ At 11:00, BOJ announces interest rate resolution and outlook report.

☆ At 14:30, BOJ Governor Haruhiko Kuroda holds a press conference.

☆ The next day 01:00, the U.S. releases total number of oil wells drilled for the week to Oct. 28.

☆ At 03:30 the next day, the US CFTC released its weekly position report.

Market Overview

Global Market Trends Review

——Data Source: jin10 & Bloomberg

On Thursday, October 27, the U.S. dollar index returned above the 110 mark, which closed up 0.811% at 110.59; the euro fell more than 1% against the dollar to lose parity, the pound fell 0.6% against the dollar to lose 1.16, and the dollar fell against the yen toward the 146 mark.

As the dollar rallied, spot gold retreated from a nearly two-week high of $1,670 and fell below the $1,660 mark, closing down 0.31% at $1,659.38 per ounce; spot silver closed down 0.09% at $19.60 per ounce.

U.S. recession fears slowed to boost oil prices, while record U.S. oil exports fueled demand optimism; WTI crude oil rose more than 2% intraday to force the $90 mark, eventually closing up 0.7% at $89.65 per barrel; Brent crude oil broke through $97 intraday, closing up 0.53% at $96.98 per barrel. European benchmark TTF Dutch futures rose more than 7%, and ICE U.K. natural gas futures rose about 11%.

U.S. stocks were mixed, with the Dow closing up 0.61%, the Nasdaq closing down 1.63% and the S&P 500 closing down 0.61%.

Most European stocks closed higher, with losses narrowing significantly after midday. Germany‘s DAX30 index closed up 0.12%, the FTSE 100 index closed up 0.25%, France’s CAC40 index closed down 0.51%, the Euro Stoxx 50 index closed down 0.02%, Spain‘s IBEX35 index closed up 0.64%, Italy’s FTSE MIB index closed up 0.9%.

Market Focus

——Source: jin10 & Bloomberg

1. The EU has reached an agreement to ban the production of new fuel vehicles from 2035.

2. The Q4 revenue guidance was less than expected. Amazon's US stock once plummeted by 21% after hours, and its market value fell by 237 billion dollars (about 1.72 trillion yuan, and Maotai's market value was 1.76 trillion yuan).

3. More than 300 organizations urged Biden to take measures to avoid the shutdown of the railway system.

4. British media: British Prime Minister Sunak plans to cut spending by up to 50 billion pounds.

5. The final draft shows that the total scale of Japan's economic stimulus plan is about 71.6 trillion yen, including 39 trillion yen of fiscal expenditure to stimulate the economy.

6. Russian President Putin: We are willing to restart strategic stability dialogue with the United States; Russia's economy is expected to contract 2.8-2.9% this year.

7. The initial annualized quarterly rate of real GDP in the third quarter of the United States recorded 2.6%, which had previously recorded negative growth for two consecutive quarters.

8. Credit Suisse Europe shares closed 19% lower, the largest one-day decline on record. Its Q3 net loss was 4.03 billion Swiss francs, far exceeding the market forecast of 504.9 million francs.

9. Apple's Q4 net profit in fiscal year 2022 was $20.721 billion, its revenue was $90.15 billion, and its iPhone revenue was $42.63 billion. The revenue in Greater China increased by 6.2% year on year. Apple said that Q1 revenue growth in fiscal year 2023 will slow down compared to the previous quarter, and Mac revenue will decline significantly in the holiday season.

10. The European Central Bank raised all three major interest rates by 75 basis points, in line with market expectations. The European Central Bank decided to adjust the interest rate applicable to TLTRO III from November 23, 2022, and provide banks with additional voluntary prepayment dates.

Geopolitical situation

——MohicansMarketsETA

Conflict situation:

1. The Ukrainian Armed Forces Air Force reported that from 22:00 to 24:00 local time on October 26, more than 20 “Shahd-136” UAVs were launched into Ukraine. The Ukrainian air force and other forces destroyed 19 UAVs, and the eastern anti-aircraft missile force destroyed one Kh-59 cruise missile.

2. General Staff of Ukraine: Ukraine has increased its military strength in the northern region to deal with possible attacks by Belarus.

3. The Russian Defense Ministry said on the 27th that the Russian military had destroyed a Ukrainian defense enterprise in Dnipropetrovsk State, which produced solid rocket fuel, explosives and gunpowder; Russian troops killed about 180 Ukrainian soldiers in Lugansk and Kharkov states on a single day.

4. Putin said that Ukraine did not abide by the Minsk agreement, which means that Russia must take action against the Donbas region; Russia has never talked about the use of nuclear weapons; As long as nuclear weapons exist, there is a risk of using them; We are willing to resume strategic stability dialogue with the United States.

5. Ukraine Power Grid said that Russia attacked the power grid in central Ukraine overnight.

6. According to the Ukrainian Pravda, a Russian military barracks in the Svatovi region of Lugansk was destroyed, killing 60 Russian troops. 

Food situation:

1. Zelensky said that Russia has blocked 175 ships that are expected to leave the port, and these ships only implement the food export agreement.

2. Food Association of Ukraine: If the food agreement is extended, the grain export of Ukraine will reach 50 million tons.

3. Russian Ministry of Foreign Affairs: No decision has been made on the extension of the Black Sea Food Agreement.

Assistance situation:

1. Defense Minister of Ukraine: Ukraine will obtain the “Eagle” type air defense system from Spain.  

2. According to the Associated Press, the United States will provide Ukraine with additional military assistance of 275 million dollars.  

Energy crisis:

1. EU Energy Commissioner Simson: We have been able to fill all the natural gas supplies cut by Russia.

2. Military authorities in Kiev, Ukraine: Kiev needs to “prepare for an indefinite emergency power outage”.

3. International Energy Agency: By 2030, Russia's share in the world natural gas market will decline by 50%.

4. German Chancellor Schultz: From 2023, German LNG terminals will be able to supply natural gas to European neighbors.

Institutional perspective

1. Goldman Sachs：The inflation expectation investigated by the European Central Bank will become the key to the future interest rate increase

2. SOCIETE GENERALE：The inflation expectation investigated by the European Central Bank will become the key to the future interest rate increase

3. MUFG：If the Bank of Canada only raises interest rates by 50 basis points, the dollar will only rebound slightly against the Canadian dollar

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