Mai hui MHmarkets: June 21, 2023 - Fundamental Reminder

☆ 14:00 GBP Inflation Rate MoM (MAY)

Currently the market expects it to record 0.5%. If the data is strong again, the market expects the BoE to raise interest rates or climb further.

☆ 22:00 USD Fed Governor Kugler Testimony & Fed Governor Cook Testimony & Fed Vice Chairman Jefferson Testimony

Previously, all three emphasized their commitment to achieving inflation targets in press releases.

☆ 22:00 USD Fed Chair Powell Testimony

It is important for investors to pay attention to his views on the pace of subsequent Fed rate hikes and the U.S. economy.

☆ The following day at 0:25, 2023 FOMC voting member and Chicago Fed President Goolsbee speaks at the Global Food Forum.

☆ The following day at 4:00, 2025 FOMC voting member and Cleveland Fed President Mester speaks.

☆ The following day at 4:30, USD API Crude Oil Stock Change (JUN/16)

If the inventory increases further, it may put the oil market under further pressure.

☆ Market closure reminder: Shanghai Futures Exchange, Dalian Commodity Exchange, Zhengzhou Commodity Exchange and Shanghai Gold Exchange will not conduct night trading tonight due to the Dragon Boat Festival holiday.

Market Overview 

Review of Global Market Trend 

On Tuesday, because of the “blowout” U.S. housing starts data, spot gold dived sharply before the U.S. market, and once fell below the $1930 mark to an intraday low of $1929.82, and then recovered some of the lost ground, finally closing down 0.72% at $1936.43 per ounce; spot silver fell straight down with gold Spot silver fell by more than 3% during the day, eventually narrowly missing the $23 mark to close down 3.32% at $23.16 per ounce.

The U.S. dollar index remained firm and rose to an intraday high of 102.80, but fell in the U.S. market, eventually closing up 0.05% at 102.53.

Crude oil once again on the “roller coaster”, WTI crude oil in the European session once rose to a daily high of $72.34, and then in the U.S. session before the retraction of all gains, and once fell below the $70 mark, and finally recovered some of the lost ground, closing down 0.84% at $70.85 per barrel; Brent crude oil closed down 0.92% at $75.38 per barrel.

The U.S. Dow closed down 0.72%, the S&P 500 closed down 0.47%, and the Nasdaq closed down 0.16%. The Nasdaq China Golden Dragon Index closed 4.9% lower, Bilibili fell more than 8%, Jingdong and Futu Holdings fell more than 6%, Tencent Music and Weibo fell more than 5%, Xiaopeng Auto, Alibaba and Vipshop fell more than 4%, iQIYI and NetEase fell more than 3%, Ideal Auto and Baidu fell more than 1%, and NIO fell slightly. Tesla closed up 5.3%, which was the best single-day performance in 6 weeks.     

European stocks were sluggish, with Germany's DAX closing down 0.55%; Britain's FTSE 100 index closed down 0.25%; France's CAC 40 index closed down 0.27%; Spain's IBEX 35 index closed up 0.1%; Italy's FTSE MIB index closed down 0.64%; Europe's Stoxx 50 index closed down 0.44%.

Market Focus 

1. The three Federal Reserve Board nominees to be confirmed by the Senate all emphasized their commitment to the inflation target in their speeches.

2. Bipartisan proposal to establish the National AI Commission.

3. Texas power prices climb 80% in hours as heat wave hits, authorities call for voluntary power savings.

4. Germany's Rhine River is disrupted by lower water levels, with some river levels dropping to 1.26 meters.

5. Deutsche Bank has applied for regulatory permission to provide custody services for digital assets such as cryptocurrencies.

6. It is reported that the EU will provide 50 billion euros in aid to Ukraine, including 33 billion euros in macro-financial assistance.

7. Chinese stocks generally closed lower overnight, with the Nasdaq China Golden Dragon Index falling nearly 5%.

8. Total U.S. new home starts in May recorded an annualized 1.631 million units, which was a new high since April 2022. The housing market recovered as spot gold moved lower and spot silver fell more than 3%.

9. British media: China National Petroleum Corporation and Qatar Energy are expected to sign a 27-year agreement in which China will buy 4 million tons of LNG per year from Qatar. 

Geopolitical Situation

Energy Situation

1. Novatek, Russia's second largest gas producer: Gas production is likely to increase by 1%-2% in 2023, with an estimated 82 BCM.

2. CEO of Novatek, Russia's largest private gas producer: There is still no news about Novatek joining Sakhalin 2 project.

3. Kazakhstan Oil and Gas Company: signed an oil supply agreement with Rosneft Germany for 2023.

4. Russian crude oil flows to the international market have declined, but are still well above February levels.

Institutional Perspective

01

Goldman Sachs

【Goldman Sachs：The U.S. IPO boom is poised to return】

June 21 - After just one year of boom-to-bust, the environment for U.S. ipos is looking up again, according to Goldman Sachs. A gauge of the overall environment for ipos has surged from a low of 7 last September to 93 and is set to continue rising. Goldman strategists told their clients that their benchmark forecasts pointed to a further improvement in the IPO environment in the second half of 2023, though the improved macro backdrop had not yet translated into IPO activity.

02

SOCIETE GENERALE

SOCIETE GENERALE：The market overstated the upside of AI stocks, downgrading South Korea to neutral and upgrading India to overweight from neutral.

03

MUFG

MUFG：The TRY could fall even if Turkey's central bank raises rates

June 20 - Turkey's central bank, under its new governor, is expected to sharply raise interest rates on Thursday, but the TRY still looks set to weaken as it is allowed to adjust more freely to competitive levels, MUFG said. Still, the more the central bank raises rates, the more effective it will be in restoring policy credibility. There are now signs that Turkey is relinquishing state control to prop up the TRY.