June 9, 2023 - Fundamental Reminder

☆ 09:30 CNY Inflation Rate YoY (MAY)

☆ 20:30 CAD Employment Change (MAY)

☆ The next day at 01:00 USD Baker Hughes Total Rig Count (JUN/09)

Market Overview

Review of Global Market Trend

America's Labour market is starting to show signs of cooling. Data on Thursday showed the number of Americans filing for USD Initial Jobless Claims accelerated more than expected last week to the highest level since the week ended Oct. 30, 2021. As a result, the dollar index briefly pushed down to 103 round numbers before closing down 0.66% at 103.34.

Treasury yields pulled back, with the two-year yield dropping more than 10 basis points at one point before recovering to close near 4.52%. The yield on the 10-year Treasury note also fell to 3.72% from around 3.79% during the day.

Spot gold continued to rise after the initial jobless claims report, briefly standing above the $1,970 mark, up more than $30 from the session's low and fully recovering the previous day's losses to settle up 1.31% at $1,965.47 an ounce. Spot silver rose sharply, standing above the $24 mark and closing up 3.52% at $24.26 an ounce.

Crude oil collapsed on rumors that the United States and Iran were close to an interim deal that would allow the Islamic State to export up to 1 million barrels a day, with both oil prices falling more than 4% before recovering some of their losses after the White House denied the rumors. WTI crude settled down 2.1% at $70.9 a barrel; Brent crude settled down 1.63% at $75.52 a barrel.

U.S. stocks closed higher across the board, with the Dow up 0.5% and the S&P 500 up 0.61%, up more than 20 % from last October's low and entering a technical bull market, while the Nasdaq rose more than 1.02 %. Tech stocks rebounded, with Nvidia and Amazon both up more than 2% and Apple up 1.5%. Tesla closed up 4.5%, its 10th straight session of gains, the longest winning streak since January 2021, while the Nasdaq China Golden Dragon Index closed up 1.6%.

European shares were mixed, with Germany's DAX30 index up 0.20%. Britain's FTSE 100 closed down 0.32%; France's CAC40 index closed up 0.27%; The Stoxx Europe 50 index closed up 0.14%; Spain's IBEX35 index closed down 0.22%; Italy's FTSE MIB closed up 0.78%.

Market Focus  

1. The White House is denying the veracity of media reports about an agreement with Iran on issues related to uranium enrichment and sanctions relief.

2. Indonesia said a ban on bauxite exports would take effect on June 10.

3. Starting July 31, South Korea's main equity derivatives market will open 15 minutes earlier than the current opening time.

4. The EU is pouring 22bn into chip research, seeking to produce 20% of the world's semiconductors.

5. Canadian wildfires send air quality to worst on record in parts of the United States The United Nations in New York has given up raising flags.

6. Scientists in the US say El Nino has officially returned and could cause extreme weather later this year.

Geopolitical Situation

Institutional Perspective 

01

Goldman Sachs

AI may boost company revenues and stock valuations, and S&P 500 may have room to rise.

02

SOCIETE GENERALE

【Societe Generale: 10-Year U.S. and German Treasury Spreads Expected to Narrow】

On June 2, Societe Generale interest rate strategists wrote in a report that there is room for a narrowing of the 10-year U.S. Treasury/German bond yield spread, which is consistent with the usual trend around the last Fed rate hike. They said, “Eurozone core inflation has yet to plummet, while the ECB's stance is less restrictive than the Fed's.” They said, “This has helped narrow the spread between U.S. Treasuries and U.S. Treasuries.” The yield spread between 10-year U.S. Treasuries and 10-year German Bonds currently stands at 135 basis points, with the 10-year U.S. Treasury yielding about 3.62% and the 10-year German Bond yielding about 2.27%, according to Tradeweb.

03

MUFG

The boosting impact of strong non-farm payrolls data on the dollar may have been partially dampened.