Chapter 28 2023.8.9 Daily News
MHMarkets
August 9, 2023 - Fundamental Reminder
☆09:30 CNY Inflation Rate (JUL)
☆22:30 USD EIA Crude Oil Stocks Change (AUG/04) & USD EIA Strategic Petroleum Reserves Change (AUG/04)
The market expects crude oil inventories to fall by 233,000 barrels.
MHMarkets
Market Overview
Review of Global Market Trend
-- Data source: jin10 & Bloomberg
NEWS
On Tuesday, spot gold fluctuated lower during the session, losing the 1930 mark and falling to an intraday low of $1,922.83 in U.S. trading, a near one-month low, before settling down 0.58% at $1,925.28 per ounce. Spot silver's losses accelerated in premarket trading and fell as low as $22.67 before ending down 1.53 % at $22.78 per ounce.
The dollar index rose sharply and hit a session high of 102.81 before paring some gains to end up 0.46% at 102.54. In U.S. Treasury yields, the two-year yield followed a V-shaped trend during the day to close at 4.760%. The yield on the 10-year Treasury fell sharply, falling below the 4 % mark at one point before closing at 4.028%.
Crude oil was on a roller-coaster day. WTI crude briefly lost the $80 mark and fell sharply to a session low of $79.65 before the U.S. session, but after Saudi Arabia reaffirmed its commitment to OPEC + preventive measures, U.S. oil recovered all the losses and turned higher in the U.S. session, ending up 0.4% at $82.78 per barrel. Brent crude settled up 0.34% at $86.13 per barrel.
The three major U.S. stock indexes opened lower and followed a V-shaped trend, with the Dow Jones Industrial Average down 0.45%, the Nasdaq down 0.79% and the S&P 500 down 0.42%. Apple edged up 0.5%, snapping a five-game losing streak. The Nasdaq China Golden Dragon Index trimmed losses to 2.3% in late trading, with NIO leading the decliners, down 5.1%, 5.2% and 8.6%, respectively, with Li Auto on its first day of trading.
Major European stock indexes closed in the green across the board, with Germany's DAX30 down 1.1%, Britain's FTSE 100 down 0.36% and the Euro Stoxx 50 down 1.12%. European bank shares fell after the Italian government announced a tax on banks' "extra" profits.
Market Focus
-- Source: jin10 & Bloomberg
NEWS
1. The US trade deficit narrowed to $65.5 billion in June, as imports fell to the lowest since November 2021.
2. Japan's trade balance in June was in surplus for the first time in 19 months.
3. WeWork said there was substantial doubt that it could continue as a going concern.
4. U.S. credit-card debt topped $1 trillion for the first time. Delinquencies are back to pre-pandemic levels.
5. The Federal Reserve updates the banking industry's regulatory plans for crypto activities: Strengthen regulation of stablecoins.
6. Japan's Kyodo News: Japan's Defense Ministry plans to request an annual budget of more than 7 trillion yen in fiscal 2024, a record high.
7. Nvidia launched the GH200+Grace Hopper for generative AI with more memory and bandwidth, which will go into production in Q2 next year.
8. Fed - Harker: The U.S. economy is on a smooth downward trajectory, or has reached a stage where interest rates can be held steady, and a rate cut is likely sometime next year. Inflation is expected to reach the 2% target in 2025, Balkin: Inflation is still too high. Don't want to "pre-announce" where rates are going.
Geopolitical Situation
——Mohicans Markets ETA
NEWS
1. The UK imposed sanctions on some executives of Iranian drone manufacturers who supplied drones to the Russian army during the conflict in Ukraine.
2. Ukraine's deputy agriculture minister: in 2023 Ukraine's grain production may reach 50-55 million metric tons.
3. Russian defense ministry: Russian forces struck 1 Ukrainian frontline command post, destroyed 17 Ukrainian drones.
4. Iranian Foreign Minister: Iranian, Russian deputy foreign ministers discuss how to deal with sanctions and BRICS cooperation.
5. Russia's fiscal deficit from January to July amounted to 2.817 trillion rubles.
6. Zelensky: Ukraine will "pick" targets if Russia blocks ports.
7. Hungarian Foreign Minister: Russia will supply oil to Hungary as contracted.
8. Putin signs a presidential decree establishing a mechanism for foreign trade settlement in rubles for Russian agricultural products through a special account.
9. Putin signs a presidential decree suspending some provisions of Russia's tax agreements with 38 unfriendly countries, including the United States.
MHMarkets
Institutional Perspective
01
Goldman Sachs
Goldman Sachs Group is reported to be issuing $2.75 billion in bonds of two maturities ahead of the release of CPI data this Thursday.
02
SOCIETE GENERALE
Societe Generale: Non farm payrolls are expected to increase by 190,000 in July, but any increase above 150,000-175,000 is strong growth. The unemployment rate will fall back to 3.5% and average hourly earnings growth will slow to a monthly rate of 0.3%.
03
MUFG
MUFG: Dollar is expected to see limited gains ahead of CPI data.
The dollar rebounded from Friday's losses after U.S. Non farm payrolls rose less than expected, but gains are expected to be limited as investors focus on key U.S. inflation data for July due on Thursday, MUFG currency economist Lee Hardman said in a note. "Last month's price action highlights how vulnerable the dollar will be to another sell-off if Thursday's US CPI report is weak," he said. If the data again shows a sharp slowdown in core inflation, it will reinforce expectations that the Fed may stop raising interest rates.
