MHMarkets：January 24, 2024,--Fundamental Reminder

17:00 EUR Manufacturing PMI Flash (JAN)

17:30 GBP Manufacturing PMI (JAN)

22:45 USD Markit Manufacturing PMI Flash (JAN) & USD Markit Services PMI Flash (JAN)

22:45 CAD BOC Interest Rate Decision & Monetary Policy Report

23:30 USD EIA Crude Oil Stocks Change (JAN/19) & USD EIA Strategic Petroleum Reserve Stocks Change (JAN/19)

23:30 CAD BOC Governor McCollum Press Conference

Market Overview

Review of Global Market Trend

On Tuesday, the U.S. Dollar index in the test 103 mark rebounded sharply, and once rose to 103.81 intraday highs, but in the U.S. trading session to give back some of the gains, and ultimately closed up 0.2% at 103.56; 10-year U.S. bond yields stood firm at 4.1% mark, closed at 4.139%; on the Fed's policy rate is more sensitive to the yield of two-year U.S. bonds closed at 4.378%.

Spot gold rebounded, its short-term pull up to $ 2037.90 in the European session of the day's highs, but then retracted some of the gains, and failed to stand firm above the 2030 mark, and ultimately closed up 0.37% at $ 2029.27 per ounce. Spot silver closed up 1.57% at $22.44 per ounce.

International crude oil sat on a “roller coaster”. WTI crude oil in the U.S. trading session once fell to $73.38 intraday low, but then recovered some of the lost ground and probed $75, and ultimately failed to stabilize here, closing down 0.19% at $74.44 per barrel; Brent crude oil returned to the $80 mark several times during the session, but still failed to stabilize above this mark, and finally closed down 0.29% at $79.63 per barrel.

The U.S. Dow closed down 0.25%, the Nasdaq closed up 0.43%, and the S&P 500 closed up 0.29%. MSFT.O again approached $3 trillion market capitalization, and closed up 0.6%. Nasdaq China Golden Dragon Index closed up 4.8%, BILI.O rose 9%, BABA.N rose 7.9%, BIDU.O and JD.O both rose more than 7%.

Major European stock indexes closed lower across the board, with Europe's Stoxx 50 closing down 0.32%, Germany's DAX 30 closing down 0.34%, and Britain's FTSE 100 closing down 0.03%.

Market Focus

1. Former Fed official Bullard believes that if the Fed is too slow to start cutting rates, he fears that it will have to do so 50 basis points at a time at future meetings.

2. The Bank of Japan on Tuesday maintained the ultra-loose monetary policy widely expected by the market, while lowering its core inflation forecast for fiscal 2024 to 2.4% from 2.8%. Governor Kazuo Ueda said further rate hikes are definitely foreseen after the exit from negative interest rates. Policy changes are still possible even if real wage growth is negative.

3. The Israeli Prime Minister said that the “third phase” of the military ground operation in the Gaza Strip would last nearly six months; Hamas is reported to have rejected a two-month ceasefire offer.

4. Israeli Military: Israeli troops have surrounded the southern Gaza city of Khan Younis. The Israeli army suffered its “deadliest day”, with a total of 24 Israeli soldiers killed in heavy fighting in the Gaza Strip.

5. The Turkish parliament approved Sweden's membership in NATO.

6. The Indian government will raise import duties on gold, silver, and precious metal coins to 15% from January 22.

Institutional Perspective

01

Goldman Sachs

【Goldman Sachs: The Fed is expected to cut interest rates four times this year, and the inflation rate will reach the target of 2%】

Joshua Schiffrin, Global Trading Strategy Director at Goldman Sachs Group Inc., pointed out in the latest report that the Fed will start cutting interest rates in March and will cut rates four times this year, with inflation reaching the Fed's target of 2%. The trading director who accurately predicted a soft landing for the U.S. economy last year predicts that central banks in Europe and the U.K. will also follow the example of the Fed. However, Schiffrin believes in his top ten predictions for 2024 that the Bank of Japan will go against the trend and raise interest rates in April. Although risk assets are expected to generally rise this year, Schiffrin warns that the first half of the year will be difficult as market bets on the timing and pace of the Fed's interest rate cuts continue to fluctuate. He suggested that investors look for opportunities in emerging markets such as Turkey and buy against the trend after China's benchmark stock index hit its low point since the epidemic.

02

Standard Chartered Bank

【Standard Chartered Bank: Moderate interest rate cuts by the Fed may also lead to a decline in the U.S. dollar, and the strengthening of the U.S. dollar may not happen again】

Steve Englander, Head of G10 Foreign Exchange Research at Standard Chartered Bank, stated that a significant interest rate cut by the Fed will have a negative impact on the U.S. dollar, but even moderate easing policies may lead to a decline in the U.S. dollar. He stated in his statement, “If economic activity and inflation are weaker than expected, leading to the Fed taking action, the U.S. dollar is likely to fall. However, the consensus on a soft landing also means that the Fed will cut interest rates.” Standard Chartered Bank believes that the situation of a comprehensive strengthening of the U.S. dollar by the end of 2021 and 2022 is unlikely to happen again, as it is driven by the Fed's uncompromising stance in dealing with inflation.

03

BNP Paribas SA

【BNP Paribas SA: It is expected that the Fed's terminal interest rate will be at 2.75%, and is optimistic about steep curve trading.】

A strategist at BNP Paribas SA stated that the expectation in the swap market that the Fed will stop cutting interest rates when the policy rate drops to about 3.5% is too optimistic. The strategist is optimistic about the steepening of the curve and treasury bond bonds in the middle of the curve. Calvin Tse, head of macro strategy for the Americas at BNP Paribas SA, said in an interview with Bloomberg TV on Tuesday that the best opportunity on the curve is not in pricing for 2024, but in market expectations for terminal interest rates, in other words, the final rate cut. The market expects the Fed to stop around 3.5%, indicating that the interest rate market is seeking a soft landing, while the BNP Paribas SA expects the landing process to be slightly more bumpy than expected, with the Fed's terminal interest rate expected to be 2.75%. Tse said, “We like to build positions in the middle of the yield curve, we like to trade with steepening curves, seeking a 5-year outperformance over a 10-year one.”