Mohicans markets：MHM Today News

October 31, 2022 - Fundamentals Reminder

☆ When Europe enters winter time, the trading time of European financial markets and the release time of economic data will be delayed by one hour.

☆ At 09:30, China announced the official manufacturing PMI in October.

☆ At 18:00, the euro area announced the initial annual CPI rate in October, the monthly CPI rate in October, and the initial annual GDP rate in the third quarter of the euro area.

☆ At 21:45, the United States announced the Chicago PMI in October.

☆ At 22:30, the US released the Dallas Federal Reserve's business activity index in October.

Market Overview

——Data source: jin10&Bloomberg

Last Friday, October 28, the US dollar index failed to recover from the 111 level, rising 0.09% slightly to 110.69, falling for two weeks in a row. After the Bank of Japan's resolution was announced, the yen fell more than 1% in the session, and the dollar broke through 147 against the yen. The pound fell first and then rose against the US dollar to close above 1.1610, up 0.4% during the day. The euro failed to regain its level against the US dollar, falling below 0.9930 in the day, falling nearly 0.4% within the day, and returning to above 0.9960 at the closing.

After the PCE announcement, the 10-year US bond yield rose 4.0% again, but fell more than 20 basis points throughout the week, ending a 12 week consecutive rise. The 10-year German government bond yield closed at 2.09%, up 14 basis points during the day. The 10-year UK bond yield fell nearly 60 basis points a week.

Spot gold fell sharply throughout the day, dropping to 1637.91 from a daily high of 1667, closing 1.11% lower at US $1644.53/oz. Spot silver fell below the 19 mark, closing 1.63% lower at $19.26/oz.

Crude oil was under pressure, and WTI crude oil fell 0.25% to 89.2 dollars/barrel; Brent crude oil closed 0.55% lower at USD 96.42/barrel. Worries about global economic growth and the COVID-19 depressed the price of crude oil.

NYMEX natural gas futures in December fell 3.25% to US $5.6840/million BTU, but rose 3.87% last week, ending a nine week losing streak. ICE UK natural gas futures closed 14.15% higher at 246.43 pence/kcal, up 20.73% last week; The Dutch natural gas futures, the European TTF benchmark, closed 4.53% higher at 112.244 euros/megawatt hour, down 1.17% last week for four consecutive weeks.

Apple shares attracted a large number of buyers. The U.S. stock market was boosted to open higher, with the Dow up 2.59%, the Nasdaq up 2.87%, and the S&P 500 up 2.46%. Apple and Intel rose 7.56% and 10.66% respectively after the performance.

Amazon fell 11% in opening trading, and its market value once fell below 1 trillion dollars. Meta rebounded and still fell more than 20% throughout the week. Last week, Microsoft, Alphabet, Amazon, Meta Platforms and other large technology stocks fell sharply after the results were announced, and the market value lost a total of 477 billion dollars. Apple is the best company, with its revenue and profit exceeding expectations.

European stocks were mixed. Germany's DAX30 index rose 0.24%, Britain's FTSE 100 index fell 0.37%, and France's CAC40 index rose 0.46%. Europe's Stoxx 50 index closed 0.24% higher, Spain's IBEX35 index closed 0.06% lower, and Italy's FTSE MIB index closed 0.27% lower.

Market Focus

——Source: jin10 & Bloomberg

1. Many countries in Europe began to implement winter time today.

2. Nick Timiraos: the Fed may “maintain high interest rates for a longer period of time”.

3. Goldman Sachs: raise the Feds forecast for the current round of interest rate hikes, is expected to raise rates to 5% in March next year (i.e. the next four meetings +75, 50, 25, 25BP respectively).

4. The SEC intends to overhaul stock trading rules, aiming to give investors better prices.

5. Iran's oil minister will visit Russia on the 31st to follow up on the progress of energy cooperation between the two countries.

6. The death toll of the stampede in Seoul, South Korea rose to 154. The cable bridge collapse in Morbi, Gujarat, India has left at least 91 people dead. Two car bombings in Mogadishu, Somalia, have killed at least 100 people and injured more than 300. Typhoon Neag has killed 80 people in the Philippines.

Geopolitical Situation

——Mohicans Markets ETA

Conflict Situation:

1. Russian Defense Ministry: Russian troops repelled the attack of the Ukrainian army in Kharkov, Kherson and Luhansk regions.

2. Ukrainian President Zelensky: Ukrainian troops repelled the “heavy offensive” of Russian troops in Donetsk region.

3. the Ukrainian Armed Forces destroyed the Tunguska and Pantsir-S1 (Armor-S1) air defense systems of the Russian Army in the southern region.

Food Situation:

1. Ukraine‘s grain exports stalled, and Russia wants to increase supply to the international market to replace Ukraine’s grain supply.

2. Joint Coordination Center (JCC) for outbound agricultural shipments from Black Sea ports: Ukraine, Turkey and the UN agreed to ship 16 grain carriers from the Black Sea on Monday under a food agreement and will inspect 40 outbound vessels, Russia has been informed of both plans; six vessels left Ukrainian ports on Sunday. Russia has suspended the inspection of grain carriers in Istanbul.

3. The sources: the decision of Ukraine, Turkey and the UN on grain departures under the grain agreement is not binding on Russia.

4. NATO calls on Russia to reconsider its decision and to urgently renew the food agreement with Ukraine so that food can reach those who need it most.

5. The UN Secretary General actively engages with all parties to end Russias suspension of participation in the food deal.

6. Turkey, for its part, said it is negotiating with Russia on the food deal.

Institutional Perspective

1. Goldman Sachs：The direction of the Brazilian market depends on the signals sent by the candidates.

2. SOCIETE GENERALE：Looking ahead to next week‘s Bank of England interest rate resolution our bank maintains its forecast of a 75 basis point BOE rate hike next week and a peak of 4.5% at the March 2023 meeting. Now that the market has stabilized, pension funds also seem to have weathered the collateral problems following the BOE’s successful intervention. A majority of members are expected to support a 75 bps hike at this meeting, with a minority supporting a 100 bps hike.

3. MUFG：Falling yields on government bonds outside Japan may limit the yens decline.