Mohicans markets：MHM Today News

MHMarkets November 2, 2022 - Fundamentals Reminder

☆ At 20:30, the United States announced the unemployment rate in October and the non-agricultural employment population after the quarterly adjustment in October. If the non farm and wage data released tonight do not slow down as expected, the hawks of the Federal Reserve are expected to continue to heat up, and the dollar is likely to rise further.

☆ 22:00 Federal Reserve Collins delivered a speech on economic and policy prospects.

☆ At 01:00 the next day, the United States announced the total number of oil drilling wells in the week from November 4.

☆ At 03:30 the next day, the United States released the position report of the Commodity Futures Trading Commission.

Review of global market trend

On Thursday (November 3), the dollar index stood at 113, the first time in nearly two weeks, rising 0.785% to 113.01. After the announcement of the Bank of England's resolution, sterling accelerated its decline against the US dollar, hovering around 1.1155 at the end of the day, and fell more than 2% within the day.

Spot gold continued to fall, as low as 1615.80, closing 0.19% lower at 1631.86 US dollars/ounce; Spot silver fell below the 19 mark in the session and ended up 0.98% at $19.47/oz.

Powell's latest speech made oil prices fall, and WTI crude oil fell 1.57% to 87.94 dollars/barrel; Brent crude oil closed 0.96% lower at USD 94.54/barrel.

US stocks continued their decline, and more hawkish bets on the Federal Reserve triggered recession concerns. The three major stock indexes collectively closed lower, with the Dow down 0.46%, the Nasdaq down 1.73%, and the S&P 500 down 1.06%.

Most European stocks fell. Germany's DAX30 index fell 0.95%, Britain's FTSE 100 index rose 0.62%, France's CAC40 index fell 0.54%, Europe's Stoxx 50 index fell 0.8%, Spain's IBEX35 index fell 1.27%, and Italy's FTSE MIB index fell 0.43%.

Market Focus

1. The sources: G7 will set a fixed price ceiling for Russian oil instead of a floating mechanism, and an agreement is expected to be reached by the end of this month.

2. The Atlanta Fed GDPNow model raised its Q4 GDP growth estimate sharply to 3.6% from 2.6% two days ago.

3. The Bank of England raised interest rates by 75 basis points as expected, which was the largest rate hike in 33 years, while releasing dovish expectations that the top rate may be lower than the market implies, while acknowledging that the UK economy is currently in recession.

4. Turkey's inflation rate rose for the 17th consecutive month in October, with a year-on-year increase of 85.5%.

5. The U.S. side sanctioned the oil transportation network accused of adulterating Iranian oil.

6. Canada will impose a 2% tax on stock buybacks starting Jan. 1, 2024.

7. Saudi Aramco: set December crude oil price to Asia at $5.45/bbl premium to Oman Dubai average price and December crude oil price to U.S. at $6.35/bbl premium to Argus sulfur-containing crude oil price.

8. UK considers raising capital gains tax, which is expected to raise £15 billion per year.

Geopolitical Situation

Conflict Situation:

1. Zelensky: The Russian attack caused a temporary power outage for 4.5 million people in Kiev and 10 other regions on Thursday night.

2. Situation on the Eastern Front: Russian troops repelled a foreign mercenary-dominated attack in Kupyansk, destroying Ukrainian tanks, armored vehicles and other military targets in the direction of Red Liman, the Russian Defense Ministry said. The General Staff of the Ukrainian Armed Forces said Ukrainian forces repelled Russian attacks at 12 locations in Luhansk and Donetsk over the past day.

3. Situation on the southern front: The Russian Defense Ministry said Russian forces repelled five Ukrainian offensives in the direction of Nikolaev to Krivoy Rog. Ukraine's Southern Operations Command said the U.S. Army conducted about 150 fire strikes in Kherson and other locations, destroying four ammunition depots, a hail rocket system and several fuel storage facilities and combat vehicles.

4. Air defense sirens were sounded in Ukraine's Cherkasy, Poltava, Dnepropetrovsk and Kharkiv regions.

Nuclear Power Plant Situation：

1. Ukraine's state-owned nuclear power company Energoatom: The Zaporozhye nuclear power plant was cut off from the grid after being shelled by Russia.

2. Rosatom. Ukraine shut down the plant's power lines, forcing both units into thermal shutdown mode.

Energy Situation：

1. The G7 alliance will set a fixed price cap on Russian oil instead of a floating price mechanism, and an agreement is expected to be reached by the end of this month.

2. UK Treasury: ban on shipping Russian crude above the oil price cap from Dec. 5, 2022.

3. German Economy Ministry: Germany and Egypt seek stronger green hydrogen, LNG partnership. 

4. Czech Republic proposes EU gas price cap compromise: implement joint procurement and establish a complementary LNG market benchmark.

5. German energy giant Uniper made a net loss of about 40 billion euros in the past nine months due to reduced Russian gas supplies.

Institutional Perspective

1. Goldman Sachs：Maintain price expectations for Brent crude oil in early 2023.

2. SOCIETE GENERALE：The Bank maintains our forecast for a 75 basis point rate hike by the Bank of England next week and a peak of 4.5% at the March 2023 meeting.

3. MUFG：The BOE is expected to suggest that today's deeper rate hike is unlikely to be the start of a series of deeper rate hikes, while market expectations for further rate hikes may still be too aggressive.

Statement|Disclaimer

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