Mohicans markets：Focus on Japan and Bank of England Interest Rate Decisions

☆ At 11:00, the Bank of Japan will announce its interest rate decision. Currently, the market still predicts that the Bank of Japan will maintain the lowest interest rate, which is -0.10%. Half an hour later, at 11:30, Bank of Japan Governor Haruhiko Kuroda will hold a monetary policy press conference. Investors can pay attention to his views on the Japanese economy and the follow-up monetary policy path of the Bank of Japan.

☆ At 15:30, the Swiss National Bank will announce the interest rate decision. At present, the market generally expects to raise interest rates by 75 basis points and get rid of negative interest rates. Then at 16:00, SNB President Jordan will hold a monetary policy press conference. Switzerland has already raised interest rates. At 50 basis points, investors can keep an eye on Jordan's view on the SNB's subsequent rate hike path.

☆At 16:00, the European Central Bank will announce the economic bulletin. Due to high inflation and the impact of the conflict between Russia and Ukraine, Fitch expects Europe to enter a recession this year.

☆At 19:00, the Bank of England will announce its interest rate decision and meeting minutes. The market currently expects it to raise interest rates by 50 basis points. It is worth noting that since December 2021, the Bank of England has raised interest rates six times, raising the policy rate from 0.1 % increased to 1.75%. Investors can pay attention to whether the minutes will mention the follow-up pace of the Bank of England's interest rate hike.

☆At 20:30, the United States will announce the number of initial jobless claims for the week ending September 17. The market expects it to record 218,000. In the early morning FOMC policy statement, it was mentioned that the Fed still believes that employment growth is strong and the unemployment rate remains low.

☆Closed reminder: The Sydney Stock Exchange will be closed today for the Queen's Day.

Global View - Mainstream Market

On September 21，Wednesday, Beijing time, spot gold staged a roller coaster market, first falling below the US$1,660 mark, and then pumping back about US$34 to a maximum of US$1,687.98, and finally closed up 0.56% at US$1,674.22 per ounce; Spot silver fell back after failing to challenge the $20 mark, and finally closed up 1.50% at $19.56 an ounce. 

The US dollar index rose sharply, reaching a high of 111.66 during the session, and finally closed up 1.05% at 111.35; Ten-year U.S. Treasury yields also rose sharply, closing at 3.534%. The yield on the 2-year U.S. Treasury bond exceeded 4%, continuing to hit a new high since 2007.

In terms of crude oil, the two crude oils rose first and then fell. WTI crude oil fell sharply after rising to a high of US$86.64/barrel in European trading, and finally closed down 1.47% at US$83.02/barrel; Brent crude oil fell below the $90 mark and finally closed down 0.94% at $89.98 a barrel.

After the Federal Reserve announced a 75 basis point interest rate hike, U.S. stocks trended repeatedly and fell again in late trading. The Dow closed down 1.7%, the Nasdaq closed down 1.79%, and the S&P 500 closed down 1.71%. Xiaopeng Motors fell about 12%, leading the decline in popular Chinese concept stocks, Weilai Automobile fell by more than 10%, and Li Auto fell by about 9%.

Most European stocks closed up. Germany's DAX closed up 0.76% at 12,767.15 points, the UK's FTSE 100 closed up 0.63% at 7,237.64 points, and the European Stoxx 50 closed up 0.71% at 3,491.87 points.

Precious metals and energy market related information

Precious Metals

Beijing time, September 22, Thursday, this trading day focuses on the number of initial jobless claims in the United States that week

Gold prices (XAU/USD) remained around $1660 as bears cheered against the dollar and risk sentiment in the Asian session on Thursday. Nonetheless, hawkish actions by the Federal Reserve and fresh geopolitical concerns related to Russia are the latest catalysts to affect metals prices recently.

Next, the direction of gold prices depends on the actions of central bankers and secondary data from the United States.

Crude Oil

On Thursday, September 22, Beijing time, please notice：

During the day, please focus on the U.S. Initial Jobless Claims for the week ending Sept.17.

Bullish factors affecting oil prices

[President of Ukraine proposes non-negotiable conditions for peaceful coexistence with Russia]

[Germany will start imposing gas surcharges from October 1st]

[Putin announces partial mobilization that immediately shakes the world]

Bearish factors affecting oil prices

[Data released on Wednesday shows the U.S. crude oil inventories increased by 1.1 million barrels]

[European Medicines Agency says outbreak not over yet]

[The Fed raises rates for third straight time by 75 basis points, and Powell vows to stand firm against inflation]

Currency Market Related Information

Currency Market

On Thursday, September 22, Beijing time, during the day please focus on: 

The Bank of Japan announces its interest rate resolution, BOJ Governor Haruhiko Kuroda holds a press conference on monetary policy, and the Bank of England publishes its interest rate resolution and minutes of the meeting.

The Feds latest forecast shows its policy rate will rise to 4.4% by the end of this year, then peak at 4.6% in 2023 to curb uncomfortably high inflation, with no rate cuts expected until 2024.

The dollar index hit a new 20-year high of 111.64 on Wednesday and ended up 1.06% at 111.37.

The euro closed down 1.32% against the dollar at 0.9836 on Wednesday. HSBC economists expect the euro to fall below a new yearly low against the dollar in the coming weeks.

European currencies bore the brunt of the sell-off in foreign exchange markets as Putin‘s comments fueled concerns about the region’s economic outlook.

Compared with other currencies, the dollar rose slightly against the yen on Wednesday, rising as high as 144.70 before closing up 0.25% at 144.07. Traders remained cautious about pushing the dollar higher given the threat of Japanese intervention to boost the yen.

The pound fell to a new 37-year low of 1.1234 against the dollar on Wednesday, before closing down 0.98% at 1.1268.

Institutional Market View point

1. Rabobank: Putins speech will support the dollar on safe-haven demand

2. Bank of America: the dollar may strengthen for a longer period of time

3. Sony Financial Group: If the U.S. and Japan rise above 150, Japan may intervene, but it is less likely

4.Dutch International Bank(ING): The Fed will maintain a hawkish stance before the policy shift in December 2023

5. Goldman Sachs: U.S. stocks in a cyclical bear market and S&P 500 will fall another 10% due to recession

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