MHMarkets ：MHM Today News

☆Today, OPEC will release its monthly crude oil market report, and investors can pay attention to their views on the future of the oil market and whether they will mention specific reasons for production cuts.

☆At 20:30, the United States will announce the number initial jobless claims for the week ended April 8, and the market expects it to record 232,000.

☆At 20:30, the United States will also release the annual and monthly PPI rates for March, and the market expects it to increase by 3% year-on-year, while maintaining the same month on month.

Market Overview

Review of Global Market Trend

On Wednesday, the unexpected fall in CPI data boosted market sentiment, and the spot gold appeared a “roller coaster” market. It hit an intraday high of $2028.17 before the US market, and then gave up most of its gains. As the Federal Reserve began to predict a mild recession in the US economy, gold recovered some of its lost ground, and stood above the 2010 mark, eventually rising 0.56% to $2014.98/ounce; Spot silver rose by over 2% during the day, firmly above $25, closing 1.78% higher at $25.50 per ounce.

The US dollar index plunged significantly and fell below the 102 mark, ultimately closing 0.6% lower at 101.53; The 10-year US Treasury yield also plunged during the session and briefly fell to a low of 3.340%, ultimately closing at 3.4%.

In terms of crude oil, the two oil companies benefited from the fall in inflation data and both saw a significant upward trend in the US pre- session. WTI crude oil rose by over 2%, reaching a high of $83.51 at one point, and ultimately closed up 2.2% at $83.22 per barrel; Brent crude oil rose by over 2% at one point and eventually closed up 1.94% at $87.16 per barrel.

The entire US stock market closed lower, with the Dow down 0.11%, the Nasdaq down 0.85%, the S&P 500 index down 0.41%, and the Nasdaq China Golden Dragon Index down nearly 4%. Popular Chinese concept stocks generally fell, with JD.com closing down 7% and Alibaba and Bilibili closing down 6%.

European stocks rose overall, with the DAX30 index in Germany rising 0.31%, the FTSE 100 index in the UK rising 0.5%, the CAC40 index in France rising 0.09%, and the Stoxx 50 index in Europe rising 0.02%.          

Market Focus 

1. The minutes of the Fed's March meeting showed that the banking crisis and high inflation prompted the hawks and doves to agree on a 25BP rate hike, respectively; Fed economists are beginning to expect a mild recession in the U.S. economy later this year.

2. U.S. CPI recorded a lower-than-expected annual rate of 5% in March, which was a new low since May 2021. Biden said the U.S. has made continued progress in fighting inflation.

3. U.S. Energy Secretary Granholm: The U.S. wants to restore oil war reserves to pre-Russia-Ukraine conflict levels.

4. The EPA proposed regulations requiring a 56% reduction in greenhouse gas emissions from light-duty vehicles by 2032.

5. Goldman Sachs no longer expects the Fed to raise interest rates in June, expecting the latter to raise rates by 25BP in May.

6. FTX bankruptcy lawyer: $7.3 billion in liquid assets have been recovered, and the exchange may reopen.

7. Warren Buffett: Banks will face problems in commercial real estate; AI technology is “excellent” but there are some concerns; Bitcoin is a gambling token; BYD is an excellent company; buying TSMC is its own decision; reducing Apple holdings for tax reasons is foolish.

8. As of Oct. 1 last year, Japan's total population was 124.94 million, down 556,000 year-over-year, which was the 12th consecutive year of decline.

9. The Bank of Canada left interest rates unchanged at 4.5% for the second consecutive time, in line with market expectations. The bank is assessing the restrictive nature of interest rates and the governor said a rate cut is unlikely this year.

Geopolitical Situation 

1. Ukrainian Prime Minister Shmegar said the counter-offensive of the Ukrainian army may start in the summer.

2. Russian Su-27 fighter jets accompany German anti-submarine patrol planes over the Baltic Sea.

3. Ukrainian Prime Minister: Ukraine needs to attract $14 billion in international donations by the end of 2023.

4. World Bank: $200 million will be contributed to help repair Ukraine's energy and heating infrastructure.

5. Serbia agreed to supply weapons to Ukraine, according to leaked U.S. intelligence documents.

6. The Dutch government plans to stop all Russian LNG imports.

7. According to TASS: On April 11, local time, Russia announced that it had successfully tested an intercontinental ballistic missile.

8. Ukrainian military spokesman: Russian mercenary group's claim to control more than 80% of Bakhmut's territory is false.

9. The Russian Foreign Ministry said that the Russian side will ban 333 Canadian citizens from entering Russia in response to Canada's sanctions.

10. The Russian Federation Council (the upper house of the parliament) considered and unanimously approved the report of the parliamentary investigative committee on the situation regarding the establishment of the U.S. biological laboratory in Ukraine on the12th, local time.

11. UN official: Ship inspection procedures under Ukraine's Black Sea food agreement resumed on Wednesday after a one-day halt.

12. The White House: The U.S. Embassy in Ukraine has a “small number of U.S. troops” who will not fight in the Russian-Ukrainian conflict.

13. Russian officials: the price differential between Urals and Brent crude is gradually narrowing. Perhaps it's time to consider reducing the legally mandated discount rate for Urals to Brent crude.

14. The U.S. Senate will hold a briefing on leaked Defense Department documents on April 19.

Institutional Perspective

01

Goldman Sachs

【Goldman Sachs: Space for Further Dollar Weakness Limited】

Goldman Sachs analysts said that concerns related to the U.S. economy could limit the scope for further dollar weakness. Goldman Sachs analysts Michael Cahill and others pointed out that the U.S. is not currently experiencing a severe credit crunch, and the Federal Reserve's recently released data on the sharp decline in bank lending sends a “false signal” because the data reflects the U.S. government is taking action to close recently failed banks. This means the U.S. economy is unlikely to weaken enough to force the Fed to deviate from its international counterparts and put downward pressure on the dollar, they said. “The market is overpricing the Fed's policy divergence and dollar weakness is approaching its limits on the U.S. side,” they wrote.

02

SOCIETE GENERALE

【Societe Generale: USDCAD May Have Peaked Like US Rates】

On April 12, no one expects the Bank of Canada's policy rate to change tonight, Societe Generale said. However, futures traders have built the largest short position in the Canadian dollar since January 2019. The USDCAD tracks relative U.S. and Canadian interest rates, but by far the biggest driver of the spread is the trend in U.S. rates. We believe the USDCAD has peaked and will move lower toward 1.25 in the coming months, even though sticky core CPI data and a tepid CBC policy statement may not give the pair much of a boost.

03

MUFG

[Mitsubishi UFJ: U.S. Inflation Data May Boost Dollar, But Potential Gains May Be Limited]

On April 12, Mitsubishi UFJ said the dollar could rise if U.S. inflation data released later show underlying price pressures remained strong in March, but potential gains could be limited. While stronger data poses upside risks to the dollar, continued concerns about the negative impact of a tightening credit environment on the U.S. economy will continue to dampen the dollar's upside potential in the near term. The market expects the Federal Reserve to cut interest rates later this year, and key to these forecasts is the assumption that the credit environment will tighten significantly and trigger a further slowdown in U.S. economic growth and inflation.