Mohicans markets：MHM Today News

November 17, 2022 - Fundamentals Reminder

☆ Pending UK releases medium-term financial plan and economic and public finance estimates.

☆ At 20:30, the chief economist of the Bank of England, Pierre, delivered a speech.

☆ At 21:00, Fed Brad delivered a speech.

☆ At 22:40, Meister of the Federal Reserve delivered a speech.

☆ At 02:45 the next day, the Federal Reserve Kashkari participated in the economic summit discussion.

Review of global market trend

On Wednesday, November 16, as the Polish missile explosion cooled down, the market demand for risk aversion declined, and the dollar index broke the 106 mark in the session. After the release of the unexpected US retail sales data, it rebounded, returned to above 106, and finally closed 0.27% lower at 106.28.

The long-term US bond yield fell to a daily low in late trading, and the 10-year US bond yield fell to 3.67% in late trading, the lowest level in six weeks since October 5. The yield of two-year US bonds rose slightly, trading at 4.36%. The yield curve of 2-year and 10-year US government bonds was inverted to a new record.

As the geopolitical situation cooled and the expectation of the US Federal Reserve turning dovish faded, the spot gold fell from a three-month high, pushed down to the US $1770 level during the session, and finally closed 0.26% lower at US $1773.71 per ounce; Spot silver peaked near $22, then fell sharply, closing 0.47 percent lower at $21.46 an ounce.

Concerns about crude oil market demand overshadowed geopolitical tensions. WTI crude oil fell 3% in the plate, and finally closed 1.77% lower at 85.30 USD/barrel; Brent crude oil once lost $92, and finally closed down 1.12% at $92.66 per barrel. European benchmark TTF Dutch gas futures fell more than 14%.

US stocks closed lower collectively, with the Dow down 0.12%, the Nasdaq and the S&P 500 down 1.54% and 0.80% respectively. Department stores were among the biggest losers, with Target closing down more than 13%. The US retail sales data exceeded expectations, and the third quarter reports of key retail stocks such as Target were not good, putting pressure on the market.

European shares closed lower under geopolitical tensions. Germany's DAX30 index closed 1.00% lower, Britain's FTSE 100 index closed 0.26% lower, France's CAC40 index closed 0.52% lower, Europe's Stoxx 50 index closed 0.83% lower, Spain's IBEX35 index closed 1.08% lower, and Italy's FTSE MIB index closed 0.64% lower.

Market Focus

1. Goldman Sachs raises Fed terminal rate expectations by 25BP to 5%-5.25% range, with paths of 1 +50BP and 3 +25BP.

2. U.S. Treasury proposes to increase the report of U.S. Treasury transactions.

3. LME: is increasing monitoring of nickel trading by increasing the initial margin requirement for nickel trading by 28%.

4. An Israeli oil tanker was hit by a drone in the Gulf of Oman on Tuesday night; the U.S. side insists it was Iranian.

5. Mitch McConnell was re-elected as the Republican leader of the U.S. Senate.

6. The U.S. House Financial Services Committee announced a hearing in December to investigate the FTX bankruptcy; SBF: the leverage level of FTX was thought to be $5 billion, but it was actually $13 billion.

7. 【Data】Japan's holdings of U.S. debt fell by $79.6 billion in September from a year earlier, after it intervened in the yen exchange rate in September; U.S. 2/10-year Treasury yields were inverted by a record amount; U.S. retail sales recorded a monthly rate of 1.3% in October, the largest increase since February; tanker tracker Petro-Logistics: OPEC exports may fall by 1 million barrels in November Daily.

8. 【Fed officials speak】Daley: terminal rate at 4.75%-5.25% rate range is reasonable. Not to the point of considering a pause in rate hikes; Barr: entities issuing stable coins are a risk that needs to be addressed, and they are borrowing the Fed's credibility. Waller: Data makes me more comfortable with a 50BP hike in December and nervous about companies raising payrolls; several officials yesterday all discussed liquidity in the U.S. Treasury market.

Geopolitical Situation

Conflict Situation：

1. The latest responses from five parties in the Polish missile incident.

①Polish president said the missile very likely came from a Ukrainian air defense system. Waiver of activation of NATO Article IV.

②Zelenski said the missile that landed in Poland does not belong to Ukraine; the Ukrainian side advocates a joint investigation into the incident.

③The Russian Defense Ministry said the missile wreckage found in Poland was identified as parts of a Ukrainian S-300 air defense missile.

④The U.S. side agreed with Poland's preliminary assessment of the missile explosion.

⑤ NATO Secretary General: The missile incident was not Ukraine's fault and there is no indication that it was the result of a deliberate attack.

2. Russian Permanent Mission to the UN: The incident in Poland was an attempt to provoke a direct military conflict between NATO and Russia.

3. Russian Defense Ministry pass: Russian artillery destroyed 2 U.S.-made M777 howitzer companies of the Ukrainian army. Russian troops repelled several counter-offensives of the Ukrainian army in the direction of Donetsk, eliminating more than 160 Ukrainian servicemen.

4. Zelensky held a meeting of the Supreme Command, which analyzed the development of the combat situation in the south and assessed the next step in frontline operations.

Assistance Situation：

1. Swedish Prime Minister: Sweden will provide more military support to Ukraine with SEK 720 million in humanitarian aid.

2. Lithuania supports the idea of deploying air defense systems on the Polish-Ukrainian border and the entire eastern flank of NATO.

Energy Situation：

1. Hungarian Foreign Minister Szijjarto: Oil supply from the Friendship Pipeline has restarted.

2. The UK will invest billions in energy efficiency to reduce energy demand by 13%.

Institutional Perspective

1.Goldman Sachs：Raised Fed terminal rate expectations by 25BP to 5%-5.25% range with a path of 1 +50BP and 3 +25BP.

2.SOCIETE GENERALE：Shorting GBPJPY may be a more attractive trading strategy.

3.MUFG：Potential split in US Congress could hit the dollar.

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