MHMarkets ：October 10, 2023--Fundamental Reminder

07:50 JPY Current Account (AUG)

16:00 CNY M2 Money Supply YoY (SEP)

18:00 USD NFIB Business Optimism Index (SEP)

22:00 USD Wholesale Inventories MoM (AUG)

01:30 FOMC Member Jefferson Speaks.

21:30 2024 FOMC Voting Committee and Atlanta Fed President Bostic speaks on the US economic outlook.

Market Overview

Review of Global Market Trend

The dollar index opened higher Monday, pulling away from a one-week low, as both hawkish Logan and Fed Vice Chairman Jefferson acknowledged the impact of rising yields on financial conditions, suggesting the Fed may not have to move as far as previously expected to raise interest rates. The dollar index fell, closing down 0.12% at 106.08.

Spot gold opened higher on risk aversion, jumping $30 at one point from the previous session to settle up 1.6% at $1,861.4 an ounce. Spot silver rose before easing to settle up 1.38% at $21.88 an ounce.

Although Israel and the Palestinians are not major energy producers, there are concerns that the conflict could spread across the Middle East. Oil prices in the United States and Bangladesh opened higher on Monday. WTI crude rose more than 5% at one point, before paring some gains to close up 4.35% at $86.34 a barrel, while Brent crude rose 4.29% at $87.48 a barrel.

After several Fed officials signaled the end of rate hikes, U.S. stocks reversed an opening slide on geopolitical tensions, with the Dow up 0.59%, the Nasdaq up 0.39% after falling more than 1% at one point, and the S&P 500 up 0.64%. Nasdaq China Golden Dragon Index closed down 0.9%, “NIo Xiaoli” dragged down the index performance, among which Xpeng Motor fell more than 10%, NIO and Li Auto both fell more than 4%.

Major European stock indexes closed lower across the board, with Germany's DAX30 down 0.66%, Britain's FTSE 100 down 0.01% and Europe's Stoxx 50 down 0.75%.

Market Focus

1. Israeli-palestinian conflict - Hamas officials say the organization has achieved its goals and is open to discussing a cease-fire with Israel; After the central bank announced plans to sell up to $30 billion in foreign exchange; Israeli Defense Minister: Ordered a complete blockade of Gaza; Foreign media: The army plans to recruit 300,000 reserve soldiers; Israel demanded that Chevron halt production at its Tamar gas platform; Israel's Ashkelon port and oil terminal have been closed following the conflict; The U.S. says it has no intention of sending ground troops; Saudi crown Prince says he will continue to support Palestinians; Iran has denied involvement in the attacks.

2. Russian Energy Minister: There is no reason to lift the gasoline export ban at present.

3. Us Treasury Secretary Janet Yellen: The US may take steps to enforce a $60 per barrel price limit for Russian oil. The rise in Treasury yields hasn't caused financial markets to misbehave.

4. Fed to release doves, Vice Chairman Jefferson: Will pay attention to the tightening effect of rising yields, the Fed can “act cautiously” in a better balance of risks, Logan: Higher yields may mean less need to raise interest rates, long-term neutral interest rates may be higher. There is considerable room for Fed balance sheet reduction, Barr: The labor market remains tight, but some important factors suggest supply and demand are coming into better balance.

5. The Council of the European Union approves the new EU defence industry Act.

6. Opec World Oil Outlook Report: Global oil demand is projected to reach 109 MB/d in 2027, up from an estimated 106.9 MB/d in 2022. Raised its global oil demand outlook to 2028 for the medium term and 2023-2045 for the long term.

Institutional Perspective

01

Pershing Square

 [Bill Ackman: Why did Hamas invade Israel last night？ Because the United States has consistently failed to keep its foreign policy commitments,]

Terrorism likes a leadership vacuum, and we have created one. The world is a more dangerous place because we have not kept our promises. It must stop now, or I dare say, hell is coming. The world is a lot safer when America leads, and when we don't, it quickly becomes a living hell.

02

Goldman Sachs

【Goldman Sachs：A prolonged period of tight monetary policy by the Fed will weigh on markets and the economy】

A prolonged period of tight monetary policy from the Fed will weigh on markets and the economy for the foreseeable future.

Persistently high inflation and strong economic data have clouded rate cut projections, while the so-called longer, higher-rate regime could weigh on gross domestic product more than expected, strategists led by Jan Hatzius noted in a note on Sunday (Oct 8).

03

ANZ Bank

【ANZ Bank：The key for the market is whether the conflict is contained or spreads to other regions】

“The key for the market is whether the conflict is contained or whether it spreads to other regions, particularly Saudi Arabia. At least initially, it seems likely that the market will view the situation as still limited in scope, duration and oil price impact. But expect higher volatility.”