MHMarkets：March 19, 2024 Economic Highlights

Date: March 19, 2024Economic Highlights (GMT + 8)TentativeJPYBOJ Policy RateJPYMonetary Policy Statement11:30amAUDCash RateAUDRBA Rate Statement12:30pmAUDRBA Press ConferenceTentativeJPYBOJ Press Conference8:30pmCADCPI m/mCADMedian CPI y/yCADTrimmed CPI y/yMarket OverviewGlobal Market RecapOn Monday, with previously released US economic data showing improvement, the market bet on the reduced possibility of a Fed rate cut in June. The US dollar index opened lower but rose throughout the day, ultimately closing up by 0.13% at 103.58. The yield on the benchmark 10-year US Treasury note closed at 4.3250%, while the 2-year US Treasury yield, most sensitive to Fed policy rates, closed at 4.7360%.Due to geopolitical tensions and ongoing central bank gold purchases globally, spot gold rebounded slightly, briefly surpassing the $2160 mark, and ultimately closed up by 0.19% at $2159.80 per ounce. Spot silver closed down by 0.57% at $25.03 per ounce.WTI and Brent crude oil prices hit new highs since late October last year due to continuous attacks by Ukraine on Russian energy facilities. WTI crude oil closed up by 1.45% at $82.14 per barrel, while Brent crude oil closed up by 1.84% at $86.83 per barrel.US stock indices rose across the board, with the Dow Jones up by 0.2%, the S&P 500 up by 0.6%, and the Nasdaq up by 0.82%. Tesla (TSLA.O) rose by 6%, while Nvidia (NVDA.O) rose by 0.7%, briefly surging over 5% during trading. The Nasdaq Golden Dragon Index fell by 0.6%, while Li Auto (LI.O) fell by 12%.Major European stock indices generally fell, with Germany's DAX30 down by 0.02%, the UK's FTSE 100 down by 0.06%, and the Euro Stoxx 50 down by 0.07%.Hong Kong stocks fluctuated narrowly, with the Hang Seng Index opening 30 points lower at 16,690 points, briefly rising by 53 points to reach 16,774 points, and then stabilizing around the opening level. By the close, the Hang Seng Index was up by 0.1%, the Hang Seng Tech Index was up by 1.25%, with a total turnover of HK$95.77 billion. In terms of sectors, supermarket and convenience store stocks, internet healthcare, and pharmaceutical distribution stocks performed well, while automotive parts, footwear, and agricultural stocks declined. Precious metals, coal, and other resource stocks also saw corrections. A-shares in both markets fluctuated upward throughout the day, with flying car and car dismantling concepts seeing significant gains. By the close, the Shanghai Composite was up by 0.99%, the Shenzhen Component was up by 1.46%, and the ChiNext Index was up by 2.25%, all hitting new highs for the year. In terms of sectors, the car dismantling concept saw significant gains, with Surpass Technology hitting its third consecutive daily limit up. The flying car concept also saw strong gains, with Wanfeng Aowei up for the second consecutive day. The AI mobile phone concept strengthened in the afternoon, with Forte Technology hitting the limit up. Among other sectors, CXO concepts, mixed reality, multimodal AI, consumer electronics, storage chips, aviation, media and entertainment, semiconductors, education, and brokerage sectors performed well, while the coal sector fell against the market. In terms of individual stocks, Contemporary Amperex Technology rose by over 5%. Approximately 4500 stocks in both markets rose, with a total turnover of about 1.2 trillion yuan. Market Highlights:· Nikkei News: Bank of Japan to End Yield Curve Control and ETF Purchases Policy· EU Drafts Law to Transfer Profits of Russian Central Bank to Ukraine· Nasdaq Pre-Market Trading Suspended for Over Two Hours· Saudi Aramco: Company Has Idle Oil Production Capacity of 3 Million Barrels/Day· Nvidia Launches Most Powerful AI Chip GB200· National Bureau of Statistics: Industrial Added Value Increases by 7.0% in January-February· Foreign Ministry: China Supports Timely Holding of International Summit· Evergrande Real Estate Fined 4.175 Billion RMB Institutional Views:1. Bank of America (BofA)The upcoming March FOMC meeting is set against a backdrop of improving economic signals and persistent inflationary pressures, yet without immediate alterations in policy anticipated. The Fed is expected to further prime the markets for a possible series of rate cuts beginning in June, showcasing a strategy that is both careful and forward-looking in pursuit of its inflation objectives. This approach highlights the Fed's dedication to managing inflation risks while fostering ongoing economic expansion.2. Credit AgricoleThe upcoming SNB meeting might offer a prime opportunity for those looking to sell the CHF, particularly if the bank's choice to stick with its present policy leads to a short-lived CHF surge. Credit Agricole indicates that the SNB's position, together with its deliberate omission of forward guidance and focus on observing CHF trends, may set the stage for advantageous CHF selling conditions post-meeting. This tactic is in line with the wider anticipation of the SNB's attempts to control the currency's valuation without immediately resorting to policy tightening measures.3. Goldman SachsThe forthcoming FOMC meeting is anticipated to showcase the Federal Reserve's ongoing cautious stance, in harmony with the trend among global central banks. This perspective implies that major shifts in the USD may be driven more by carry and cyclical considerations rather than immediate policy adjustments in the short run. Goldman Sachs' review suggests that although rate reductions are approaching, the transition towards easing is expected to be measured, reflecting the deliberate approaches adopted by central banks around the globe.4. BNP ParibasSupportive flow dynamics could provide a boost to the EUR, but the mix of robust US economic data, the ECB's comparatively more assertive easing policy relative to the Fed, and the prevailing inclination towards carry trades indicate a more tempered EUR/USD appreciation rate. BNP Paribas' revised projections now foresee a more gradual ascent for the currency pair, with substantial gains projected for 2025, shifting expectations away from the short term.5. Morgan StanleyThe market response to the expected policy shift by the Bank of Japan underscores a collective anticipation of an interest rate increase, as evidenced by the USD/JPY trends exhibiting a “buy the fact” behavior. This indicates that traders might be already adjusting their strategies based on the assumption that the BoJ's rate hike is nearly certain. Morgan Stanley's commentary sheds light on a sophisticated grasp of how market dynamics and trader expectations evolve in the lead-up to significant central bank announcements.