MHMarkets ：MHM Today News

☆ 09:45 CNY Caixin Services PMI (APR)

☆ 13:45 CHF Unemployment Rate s.a (APR)

☆ 14:30 CHF Inflation Rate MoM (APR)

☆ 14:45 EUR France Industrial Production MoM (MAR)

☆ 17:00 EUR Retail Sales MoM (MAR) & Swiss Central Bank Governor Jordan Speech

☆ 20:30 CAD Employment Change (APR) & USD Unemployment Rate (APR) & USD Non Farm Payrolls s.a (APR)

☆ The following day at 01:00 USD Baker Hughes Total Rig Count (MAY/05) & Fed Bullard Speech & Fed Governor Lisa Cook Speech

Market Overview

Review of Global Market Trend

On Thursday, shortly after the Fed's interest rate resolution was announced, the banking crisis escalated again; the U.S. dollar index continued to fall after the opening, once under the forced 101 mark before the European session; however, last night after the European Central Bank interest rate resolution slowed the pace of interest rate hikes as expected, the euro weakened to push the U.S. index moderately higher, once up to 101.64 during the day, closing up 0.24% at 101.45.

U.S. bond yields shocked lower, where the two-year U.S. bond yields more sensitive to the interest rate outlook fell less, from near 3.80% to 3.79% during the day; 10-year U.S. bond yields fell from 3.40% to near 3.38% during the day.

Spot gold was affected by risk aversion opening riot, opening Thursday surged more than $30 to $2079.76 per ounce, which was a record high; then fell sharply, once turned down during the day; the U.S. session due to rumors that another U.S. bank may collapse and regained momentum, closing up 0.53% at $2050.31 per ounce. Spot silver stood at the $26 mark, closing up 1.84% at $26.05 per ounce.

Crude oil experienced a sharp sell-off in the previous three consecutive trading days, and closed on Thursday to rebound; however, the opening of WTI crude oil on Thursday had a flash crash and fell by more than 5% to $64.31 per barrel, a much larger drop than Brent crude oil, and then continued to rebound, triggering speculation of a “Fat Finger” to close up 0.71% at $68.57 The company's price was up 0.71% at $68.57 per barrel; Brent crude closed up 0.78% at $72.46 per barrel.

U.S. regional banks plunged collectively, with the Dow closing down 0.86%, the Nasdaq closing down 0.49%, and the S&P 500 closing down 0.74%. Top Chinese stocks rose, Azera Motors and Xiaopeng Motors closed up 5%; regional banking stocks fell hard, KBW Bank Index closed down 3.8%, Westpac Hopewell Bank closed down 50%, market capitalization was reported at $370 million, Alerans West Bank closed down 38%, First Horizon Bank closed down 33%.

European stocks fell across the board, Germany's DAX30 index closed down 0.54%; Britain's FTSE 100 index closed down 1.08%; France's CAC40 index closed down 0.85%; Europe's Stoxx 50 index closed down 0.59%; Spain's IBEX35 index closed down 0.38%; Italy's FTSE MIB index closed down 0.63%.      

Market Focus

1. The bond market once aggressively priced the Fed to cut rates by 25BP in July, and the probability of a rate cut has fallen back to 50% this morning.

2. The European Central Bank raised all three major interest rates by 25 basis points and said it could continue to tighten policy even if the Fed suspended rate hikes.

3. Default fears caused short term bonds to be sold, and the U.S. one-month Treasury auction bid rate hit a record high of 5.84%.

4. Banking crisis:

①The FDIC is reportedly considering making the big U.S. banks cover more insurance fund supplements, and the relevant plan may be announced next week.

②The Financial Times said Alains West Bank is considering selling its business, the latter denied and said the Financial Times was used by short sellers.

③Westpac Consolidated Bank: has not experienced unconventional deposit flows, and the sale plan is still in progress.

④Toronto-Dominion Bank and First Horizon Bank agreed to terminate the merger agreement.

⑤ Westpac Consolidated Bank closed down 50% overnight, Alerans West Bank closed down 38% and First Horizon Bank closed down 33%.

⑥U.S. Treasury reiterated deposit stability as well as adequate liquidity; sources said authorities may be evaluating bank stocks for market manipulation.

5. Saudi Arabia lowered the price of all oil sold to Asia in June.

6. Apple's Q2 iPhone revenue beat expectations as it raised its dividend and authorized a stock buyback program of up to $90 billion.

Geopolitical Situation

Conflict Situation：

1. Ukrainian President Zelensky: Ukraine will not negotiate with Russia on anything.

2. Russia says the U.S. was behind Ukraine's attack on the Kremlin. The U.S. National Security Council spokesman Kirby said that the U.S. does not encourage or allow Ukraine to launch attacks outside its borders.

3. Ukraine's “drone force” program trained 10,000 drone operators, according to Ukrainska Pravda.

4. Russia held the second night rehearsal of the Victory Day parade in Moscow's Red Square.

5. U.S. Director of National Intelligence John Haynes says Russia is unlikely to launch a “major offensive operation” in Ukraine this year due to a lack of ammunition and troops.

6. Russian Defense Ministry: In the direction of Donetsk and Red Liman, Russian troops struck the targets of the Ukrainian army, including personnel, weaponry and command observation points, ammunition depots and fuel depots.

7. General Staff of the Armed Forces of Ukraine: In the past 24 hours, the Armed Forces of Ukraine repelled Russian offensives in the direction of Bakhmut and others.

Assistance Situation：

1. Belgian Prime Minister: Belgium is preparing a new package of military assistance to Ukraine.

2. Dutch Prime Minister Rutte: We are discussing more assistance to Ukraine.

3. According to the Ukrainian media: Ukrainian President Zelensky in the Netherlands visited the country's commitment to provide equipment to the Ukrainian army, including “Patriot” air defense systems, artillery and armored vehicles.

4. Ukraine's international reserves grew by 13% in April, reaching an 11-year high.

Sanction Situation：

1. The EU plans to implement the 11th round of sanctions against Russia this month; the sanctions target countries that help Russia evade them.

2. Ukrainian President Zelensky: Ukraine wants to use all confiscated Russian assets to rebuild Ukraine.

3. Hungarian Foreign Ministry: Hungary will not allow restrictions on Russian nuclear energy.

Energy Situation

1. Russian Deputy Prime Minister Novak: The flow of Russian oil to the EU has fallen by more than two-thirds.

2. Saudi Arabia cut the price of all oil sold to Asia in June.

3. Russian oil exports from western ports are about to reach a four-year high of 2.42 million bpd in May, sources said.

Institutional Perspective

01

Goldman Sachs

Goldman Sachs is cooperating with the U.S. investigation of Silicon Valley Bank.

02

SOCIETE GENERALE

Societe Generale: S&P 500 uptrend will continue once it breaks 4195/4220

May 3, Societe Generale said the S&P 500 is close to key graphic resistance 4195/4220, representing the February peak and the previous gap down. It has been within a bottom since October. Notably, the 50-DMA has crossed above the 200-DMA, forming a golden cross; this points to a potential upside. A breakout to the upside looks imminent. Once the index builds above 4195/4220, expect the uptrend to continue. The next potential targets could be last August's highs of 4320 and 4510.

03

MUFG

George Goncalves, head of U.S. macro strategy at Mitsubishi UFJ: This FOMC statement is consistent with the Fed's statement in 2006, when the Fed pushed the federal funds rate up to a peak of 5.25%. They never said outright “we're done (raising rates),” but in my opinion, this is the closest they've come to doing that.