Mohicans markets：MHM Today News

February 14, 2023 - Fundamental Reminder

☆ At 10 o'clock, the Japanese government will submit the nomination for the governor of the central bank. At present, many media reports have said that this candidate will be Kazuo Ueda.

☆ At 21:30, the United States will release the January CPI data. At present, the market expects that it will increase by 6.2% YoY, down from the previous 6.5% increase.

☆ At 0am the next day, Dallas Federal Reserve Chairman Logan will attend the Q&A. He is also the first official to give a speech after the CPI data is released, and pay attention to his views on the US January CPI data.

☆ At 0:30 in the morning and 3:05 in the morning, the Chairman of the Federal Reserve of Philadelphia and the Chairman of the Federal Reserve of New York and the permanent voting committee of the FOMC will make speeches. Pay attention to their views on the CPI data and their terminal interest rate expectations.

Market Overview

Review of Global Market Trend

On Monday, the spot gold reached the daily high of 1866.43 US dollars before the European market and took back all its gains, and fell to the low of 1850 US dollars at one time, and finally closed down 0.65% at 1853.57 US dollars/ounce; Spot silver still fluctuated in a narrow range around the US $22 threshold, and ended down 0.1% at US $21.99/ounce.

The US dollar index opened its decline before the US market and ended down 0.29% at 103.29; The yield of 10-year US Treasuries rose to 3.755%, the highest level since January 6, and finally reached 3.704%.

In terms of crude oil, after the news that the oil export terminal at Ceyhan Port in Turkey resumed operation and that the United States would sell oil war reserves again, the rising trend of the two oil companies “stalled”. WTI crude oil briefly stood at the $80 mark and then fell sharply, ending 0.8% lower at $79.10 per barrel; Brent crude oil closed 0.8% lower at US $85.74/barrel.

The US stock index ended up 1.11%, the Nasdaq index ended up 1.48%, and the S&P 500 index ended up 1.14%. CCS shares performed strongly, with Baidu up about 6%, Ideal Auto up about 5% and Pinduoduo up about 4%.

European stocks rebounded, with Germany's DAX30 index rising 0.58% to 15397.34; The FTSE 100 index of the UK rose 0.83% to 7947.6; The European Stoxx 50 Index closed 1.03% higher at 4241.36.

Market Focus

1. The news said that the United States planned to release 26 million barrels of oil war reserves from April to June, which was contrary to the previous intention of the Ministry of Energy to stop the sale, and the oil price fell.

2. Toxic gas leakage incident in Ohio, USA: local residents felt unwell and reporters were briefly detained. The authorities said the air level was safe, but did not make final recommendations.

3. Qatar is preparing to acquire Manchester United.

4. New Zealand declared a state of emergency due to the hurricane.

5. The US judge approved the release of part of the report on Trump's attempt to overturn the election results on the 16th.

6. The Federal Reserve of New York's January forecast survey: the inflation expectation of the United States in the next year is 5%, and the expected decline in household income is the largest in history.

7. Türkiye considers extending the closing time of the stock market; Crude oil loading at the oil export terminal of Ceyhan Port, Türkiye has resumed.

8. The EU Economic Expectation Report: The economic growth forecast of the euro area in 2023 was raised to 0.9% from 0.3% previously.

9. Bridgewater Q4 reduced its holdings in China Concepts Stock, and Microsoft and Apple were almost cleared, favoring big financial stocks; BlackRock Q4 increased its position in large technology stocks and increased its holdings in Bilibili by nearly 600%.

Geopolitical Situation

Conflict Situation：

1. The press secretary of the Russian President Peskov said that Russia has no possibility of a second partial mobilization.

2. The Russian Ministry of Defense released a message that the Russian army had killed more than 110 Ukrainian soldiers in the direction of Kupiyansk and Zinchman in the past day.

Sanction Situation:

1. Russian Ambassador to the United Kingdom: The U.K. plans to confiscate frozen Russian assets and is formulating legislation for this purpose.

2. The Swiss government has frozen Russian assets worth $8.1 billion, and Credit Suisse Group has frozen other Russian assets, which are subject to sanctions by other countries.

3. Some of the sanctions imposed by the EU on Rosatom are unlikely to be implemented, because several countries have expressed opposition.

Energy Situation：

1. The U.S. will sell another 26 million barrels of crude oil from the strategic crude oil reserve.

2. Deputy Prime Minister Novak of Russia: Russia plans to sell more than 80% of its oil exports and 75% of its oil products to “friendly” countries in 2023.

3. On February 13 local time, the natural gas pipeline in Yaroslavl, Russia, exploded and the open fire was extinguished.

4. In response to the energy crisis, European countries have paid nearly 800 billion euros, of which Germany ranks first with 270 billion euros.

5. According to Reinitiv data, due to the embargo, tanker shortage and bad weather, Russia's fuel exports fell by about 10% from February 1 to 12.

6. The seven member countries jointly called on the EU to postpone the reform of electricity market rules and only make limited adjustments.

Assistance Situation：

1. Ukrainian military personnel have begun to carry out the training of “Leopard 2” tank in Germany.

2. Ministry of Defense of Ukraine: Denmark has handed over all its Caesar self-propelled howitzers to Ukraine.

3. Austrian Defense Minister: Austria will not provide training for the “Leopard 2” tank for Ukraine.

Institutional Perspective

01

Goldman Sachs

The Bank of India is expected to continue to raise interest rates in the future. The next interest rate meeting of the Bank of India will be held in April.

02

SOCIETE GENERALE：The EURUSD is bullish for a long time.

After the market interpreted the European Central Bank's interest rate decision in February as a dove, the rise of the EURUSD stopped abruptly. Economists from Faxing Bank pointed out that in the long run, the EURUSD still points upward. Technically, the possibility of further profit taking cannot be ruled out. The European Central Bank may try to correct the dove interpretation of the market's interest rate decision and statement in February, which may attract euro buying, but confidence may remain low until the US CPI is released next week. Due to the improvement of its own terms of trade, the boost of China's economic growth, the narrowing of the policy interest margin of the Federal Reserve/European Central Bank and the attractive valuation, the long-term trend of EURUSD is still inclined to rise. The main downside risks are the new offensive launched by Russia against Ukraine, the further deterioration of relations between Russia and the West and the interruption of energy supply in Europe.

03

MUFG：The dollar has recovered most of its losses since the beginning of the year.

Mitsubishi UFJ Financial Group said in a report that the US dollar continued to strengthen and reached its highest level against a basket of currencies in nearly four weeks after the release of the better-than-expected US employment data last Friday, as the US economy looked more resilient and there might be more interest rate hikes. Market participants have begun to price the possibility that the Federal Reserve will raise interest rates at least twice by 25 basis points before suspending the rate increase cycle. The US interest rate market has lowered its expectation of starting to cut interest rates later this year, so the US dollar has recovered most of the decline since the beginning of the year.