MHMarkets：March 08, 2024 Economic Highlights

Date: March 08, 2024

Economic Highlights (GMT + 8)

9:30pm

CADEmployment Change

CADUnemployment Rate

USDAverage Hourly Earnings m/m

USDNon-Farm Employment Change

USDUnemployment Rate

Market Overview

Global Market Recap

On Thursday, influenced by Powell's dovish remarks, the US Dollar Index weakened, falling to a more than six-week low, closing down 0.54% at 102.81. The yield on the benchmark 10-year US Treasury ended at 4.0885%, while the yield on the 2-year US Treasury, most sensitive to Federal Reserve policy rates, ended at 4.5034%.

Due to Powell's comments increasing bets on interest rate cuts, central bank purchases continuing, and heightened geopolitical tensions boosting safe-haven demand, spot gold reached new highs, securing a seven-day winning streak. It briefly surpassed $2164 per ounce during the session, finally closing up 0.55% at $2160.02 per ounce; spot silver closed up 0.65% at $24.33 per ounce.

WTI crude oil fluctuated upward, closing up 0.43% at $79.56 per barrel, amid fermenting incidents of Houthi attacks on commercial ships and anticipation of interest rate cuts by several central banks. Brent crude oscillated lower during Asian and European trading but recovered in the US session, closing nearly flat, down 0.04% at $83.88 per barrel.

US stock indices all rose. The Dow Jones increased by 0.3%, the S&P 500 by 1% reaching a new closing high, and the Nasdaq by 1.5%. Nvidia (NVDA.O) rose 4.4%, marking its sixth consecutive day of gains, while Apple (AAPL.O) slightly fell, marking its seventh consecutive day of losses, narrowing their market capitalization gap to $300 billion. New York Community Bank (NYCB.N) rose 5.7%. The Nasdaq Golden Dragon China Index fell 0.85%, with Bilibili (BILI.O) dropping nearly 2%, JD.com (JD.O) falling more than 3%, and Tencent Music (TME.N) rising more than 7%.

European stock indices all closed higher, with Germany's DAX 30 up 0.71%, the UK's FTSE 100 up 0.17%, and the Stoxx Europe 50 up 1.19%.

The Hang Seng Index in Hong Kong opened nearly flat, slightly rose before oscillating lower. In the afternoon, the Hang Seng Index once fell nearly 2%, with the Hang Seng Tech Index dropping more than 2.5%. At close, the Hang Seng Index was down 1.27%, and the Hang Seng Tech Index fell 1.56%; total trading volume was HK$98.009 billion. Influenced by news, the WuXi AppTec group performed poorly throughout the day, with WuXi Biologics (02269.HK) and WuXi AppTec (02359.HK) closing down nearly 20%. Precious metals continued strong, with Zijin Mining (02899.HK) closing up more than 4%. Among popular tech stocks, JD.com (09618.HK) closed up 6%, and Weibo (09898.HK) rose 1.44%.

China's A-share indexes moved lower. By the close, the Shanghai Composite was down 0.41%, the Shenzhen Component Index fell 1.37%, and the ChiNext Index dropped 2.33%. Non-ferrous metals surged, with electric alloys and Sichuan Gold hitting the daily limit. The tourism sector strengthened in the afternoon, with Dalian Sun Asia and Changbai Mountain hitting the daily limit. Additionally, transportation equipment, aquaculture, and steel sectors were among the top gainers; while AI phones, Sora concept stocks, pharmaceuticals, media and entertainment, and semiconductors were among the top losers. The total trading volume for both markets was around 980 billion yuan.

Bitcoin briefly returned to the $68,000 mark, eventually closing up 1.98% at $67,429 per coin; Ethereum touched a high of $3900 per coin, reaching its highest since December 2021, with a daily gain of 2.18% at one point, finally closing up 1.6% at $3883.07 per coin.

Market Highlights:

· Powell: Confidence in Cutting Interest Rates Is Not Far Off

· Powell: Expected Bank Failures Triggered by Commercial Real Estate

· European Central Bank Keeps Three Key Interest Rates Unchanged as Scheduled

· Hamas Says Gaza Ceasefire Agreement Talks to Resume Next Week

· Israel May Wage “War” Against Hezbollah

· People's Bank of China: Gold Reserves Increased for the 16th Consecutive Month

· General Administration of Customs: Trade in Goods Reaches New Historical High for the Same Period

Institutional Views:

1. Bank of America (BofA)

The short-term future of the US dollar is shaped by factors like Federal Reserve policy expectations, global economic sentiment, and key upcoming data, with recent reassessments pausing its advance. Bank of America (BofA) highlights the importance of closely monitoring these developments for signals on the dollar's direction. Simultaneously, BofA notes the Australian dollar (AUD) faces its own challenges with potential for monetary policy adjustments by the RBA amid softening economic indicators and uncertainties around China's economic recovery. However, improvements in China's property market could boost the AUD, with BofA urging a cautious approach to trading NZD and CAD due to cross-market growth disparities.

2. ING

Considering the yen's current undervaluation and the anticipated changes in Japan's monetary policy, ING perceives a tactical advantage in betting against the EUR/JPY pair. The financial institution forecasts a short-term shift towards 160, expecting a more significant drop beneath this threshold as expectations for interest rate increases become more entrenched. Investors are encouraged to pay close attention to forthcoming wage data and communications from the Bank of Japan for additional guidance.

3. Credit Agricole

Credit Agricole cautions against making definitive predictions about the USD's behavior around US presidential elections, pointing out that the historical data available for analysis is somewhat restricted. Despite this, the bank acknowledges a recurring pattern of short-term USD strength following presidential elections. However, it emphasizes that the magnitude of this trend can differ widely, influenced by the particular political landscape and prevailing market emotions during each election cycle.

4. Morgan Stanley

Morgan Stanley forecasts sustained, albeit slightly slower, job growth in the US for February 2024, indicating a deceleration from previous months' trends. The report suggests a stable outlook for wage growth and unemployment rates, alongside a possible increase in the labor force participation rate, depicting an economy that remains robust yet is undergoing adjustments in its labor market dynamics. This analysis is critical for guiding both policymakers and investors regarding the health of the US economy and the prospective paths for monetary policy adjustments.

5. MUFG

The latest meeting of the European Central Bank (ECB) highlighted a careful but steadfast stance on monetary policy, supporting the Euro's immediate stability. This development, while not drastically altering MUFG's view on the Euro, emphasizes the importance of upcoming economic indicators in influencing ECB decisions. MUFG continues to advise a short position on EUR/GBP, predicting that the ECB's potential rate changes prior to those of the Bank of England, along with advantageous conditions for carry trades, could favor the pound over the euro.