Mohicans markets：MHM Today News

☆ Pending OPEC's monthly crude oil market report

☆ 15:00 ILO unemployment rate in the three months of January in the UK, unemployment rate in February in the UK, and the number of applicants for unemployment benefits in February in the UK

☆ 18:00 US February NFIB Small Business Confidence Index

☆ At 20:30, the annual rate of unseasonally quarter adjusted CPI in the United States in February, the monthly rate of post-quarter adjusted CPI in the United States in February, and the annual rate of unseasonally quarter adjusted core CPI in the United States in February

☆ API crude oil inventory for the week from 04:30 the next day to March 10

☆ At 05:20 the next day, Federal Reserve Governor Bob Bowman delivered a speech on the modernization of the US banking system

Market Overview

Review of Global Market Trend

Affected by the collapse of many banks, including the Bank of Silicon Valley, the market's expectation of the Federal Reserve's interest rate increase suddenly cooled. The dollar index fell below 104, down nearly 1%, to 103.49, down 0.59%, to 103.63. Non-U.S. currencies rose generally, with the offshore RMB rising by 1064 points, reaching 6.83, the highest level in three and a half weeks since February 15.

The demand for risk aversion flooded into the US bond market, and the US bond yield also fell sharply. The two-year US bond yield fell by 60 basis points and fell by 4% at one time. The cumulative decline in the three trading days of the day was more than 100 basis points, which was the largest three-day decline since the “Black Monday” stock disaster of US stocks in October 1987. As of the closing of US stocks, the trading volume was around 4.01%. The yield of 10-year US Treasuries once pushed down 3.41%, hitting a five-week low since February 3, and fell from 3.7% to 3.54% within the day. The upside down range of the yield of the two-year and 10-year US Treasuries narrowed to less than 50 basis points.

Risk aversion continued to be positive for precious metals. Spot gold rose nearly $50 in the intraday and continued to rise after breaking the $1900 threshold, closing up 2.09% at $1913.36/ounce; Spot silver once reached the US $22 mark in the intraday, closing up 5.88% at US $21.79/ounce.

As a risk asset, the crude oil market once fell more than 5%, WTI crude oil once fell to 72.3 US dollars/barrel, Brent crude oil once fell below the 80 US dollars/barrel mark, and the lowest fell to 78.33 US dollars/barrel. However, boosted by Chinese demand, the decline at the beginning of the US market once narrowed to about 2%, and WTI crude oil closed down 2.4% at 74.68 US dollars/barrel; Brent crude oil closed 2.99% lower at US $80.65/barrel.

European natural gas fell sharply, the benchmark Dutch TTF natural gas futures fell by more than 9% in the intraday, missed the 50 euro/MWh barrier, and ICE UK natural gas fell by 8.7% in the intraday, both of which were out of the three-week high.

The three major US stock indexes opened lower and rose higher, with the Dow down 0.28%, the Nasdaq up 0.45%, the S&P 500 index down 0.15%, the “panic index” VIX soaring to 30, the KBW banking sector closing down more than 11%, the First Republic Bank down 61%, the Alexis West Bank down 47%, the Western Pacific Union Bank down 21%, and the Nasdaq China Golden Dragon Index up 1.1%.

After the opening of the US stock market, the banking part continued to decline. United States Bank, Bank of America and Wells Fargo all fell more than 7% at the beginning of the session, Citigroup fell more than 6%, and UBS and Barclays fell nearly 5%. The Bank of First Republic fell 67% at the beginning of the session, the largest drop on record. Alenes West Bank once fell below the limit; Western Pacific Union Bank fell nearly 60% at one time and touched the circuit breaker twice in the session. The Dow Jones index excludes signature banks from some indexes. The MSCI Global Standard Index excludes SVB Financial Group.

European stocks fell sharply across the board, with Germany's DAX30 index down 3.08%, Britain's FTSE 100 index down 2.60%, France's CAC40 index down 2.90%, Europe's Stoxx 50 index down 3.17%, Spain's IBEX 35 index down 3.55% on March 13, and Italy's FTSE MIB index down 4.05%.

Market Focus

1. The disturbance of Silicon Valley Bank：

① As of this morning, the swap market expects less than 60% probability of the Fed +25BP in March, with the terminal rate reaching 4.77% in May and a cumulative 100BP cut to 3.75% by the end of the year.

② Biden reassures the market on the SVB incident and asks Congress and regulators to strengthen banking rules.

③ All three major international index companies remove Silicon Valley Bank from the relevant index; Credit Suisse CDS rises to a new high.

④ The FDIC is preparing to auction Silicon Valley Bank again.

⑤ The Federal Reserve will investigate its supervision of SVB and issue a review by May 1. Its supervision of SVB has been questioned.

⑥ SVB management has been hit with a securities fraud lawsuit by shareholders.

⑦ HSBC Holdings: acquisition of Silicon Valley Bank's UK subsidiary for £1; SVB's German and Canadian branches are placed in receivership.

⑧ Traders expect the Bank of England to be only +37 basis points again, the ECB has a 50% probability of +50BP this month and the Australian Fed is nearing the end of its rate hike cycle.

⑨ Banks that provide a source of cash for U.S. regional banks to increase the size of short-dated debt offerings; Fannie Mae postponed trading in high-risk mortgage bond offerings due to volatile market conditions.

⑩ The KBW Bank Index fell 11% overnight, First Republic Bank, which had suffered a run, closed down 61%, gold and silver and cryptocurrency rose sharply, 2-year U.S. bond yields hit the largest drop in more than 30 years, and the upside down with 10-year U.S. bond yields narrowed to less than 50BP, the panic index soared to 30, and the offshore RMB rose 1,000 points at one time;

2. Saudi Aramco CEO: The current government does not authorize Saudi Aramco to increase production capacity above 13 million barrels per day.

3. Maldives decides to restore diplomatic relations with Iran.

Geopolitical Situation

Conflict Situation：

1. According to Sputnik: military expert Andrei Marochko said that the Ukrainian troops on the front line in Kremennaya in the Donbas region are facing a shortage of fuel.

2. The governor of Russia's Belgorod region: two regional air defense systems in the region were activated and a total of four missiles were shot down. One person has been injured in the incident and first responders have gone to the site of the incident.

3. Russian Defense Ministry: Russian forces struck U.S. Army personnel and weaponry in the direction of Kupyansk, Red Liman and Donetsk. Russian air defense systems intercepted Ukrainian rockets and missiles and shot down a number of Ukrainian drones.

4. Ukrainian military: The Ukrainian Armed Forces repelled multiple Russian attacks in five directions, including Red Liman and Bakhmut. The Ukrainian Air Force, missile units and artillery units carried out strikes against Russian personnel and other targets.

5. Zelensky: In less than a week, more than 1,100 Russian soldiers have been killed and 1,500 wounded in Bakhmut, and more than a dozen ammunition storage sites have been destroyed.

Institutional Perspective

01

Goldman Sachs

Given the recent stress in the banking system, the Fed is no longer expected to raise rates at its March 22 meeting, with a final rate of 5.25-5.5% now expected.

02

SOCIETE GENERALE

【Societe Generale: ECB Unlikely to Make Surprise Policy Next Week】

March 10, Societe Generale interest rate strategists wrote in a report that the ECB is not expected to make many market surprises in terms of monetary policy decisions, and the market's reaction is expected to depend on the hawkishness of Lagarde's press conference. In line with general market expectations, Societe Generale expects the ECB to raise interest rates by 50 basis points next week, bringing the deposit rate to 3.00%.

03

MUFG

The Bank of Japan is expected to keep its original policy unchanged, although there is a risk of exceeding expectations and the yield target will be adjusted by the next governor, possibly at the June meeting.