Mohicans markets：MHM Today News

November 18, 2022 - Fundamentals Reminder

☆ 09:05 Federal Reserve Chairman Powell and other officials attended the event.

☆ At 15:00, the UK announced the quarterly adjusted monthly retail sales rate in October.

☆ At 16:30, European Central Bank President Lagarde delivered a speech.

☆ 23:00 The United States released existing home sales annualized in October , Conference Board leading index monthly rate in October.

☆ At 02:00 the next day, the United States announced the total number of oil wells drilled in the week to November 18.

☆ At 04:30 the next day, the US Commodity Futures Trading Commission released its weekly position report.

Market Overview

Review of global market trend

On Thursday, November 17, several officials of the Federal Reserve made statements suggesting that the interest rate hike was far from over. Last week, the number of Americans who applied for unemployment benefits for the first time did not increase, but fell. It was close to a historical low, highlighting the strong job market and strengthening the reason for interest rate hike. The dollar index rebounded, breaking through the 107 mark in the session, and finally ended up 0.38% to 106.69.

The US Treasury yield rose further in the session, driven by the speech of the Fed officials. The yield on the 10-year note rose 2.04% to 3.769%, while the yield on the two-year note rose 2.23% to 4.46%.

With both the US dollar index and US bond yield rising, spot gold fell under pressure, falling below the 1760 mark in the session, and finally closing down 0.74% to 1760.57 US dollars/ounce; Spot silver closed 2.37% lower at $20.95/oz.

As the dollar rebounded and recession fears intensified, WTI crude oil fell by more than 4%, closing 3.81% lower at $82.05 per barrel; Brent crude oil fell 3% in the market, falling below $90/barrel for the first time since October, and finally ended down 2.84% to $90.03/barrel, close to the 90 mark. US natural gas futures continued to rise, with an intraday increase of 5%.

US stocks opened lower. After US Speaker Pelosi said he would not run for Democratic leadership, US stocks recovered some losses in late trading. The Dow closed slightly lower by 0.02%, while the Nasdaq and the S&P 500 closed 0.35% and 0.27% lower respectively. Public utilities and materials sectors led the decline, and most of the popular Chinese stocks rose. Alibaba closed 7.8% higher after the performance.

In addition to the German stock index, European stocks generally closed lower. The German DAX30 index closed 0.22% higher, the British FTSE 100 index closed 0.05% lower, the French CAC40 index closed 0.47% lower, the European Stoxx 50 index closed 0.17% lower, the Spanish IBEX35 index closed 0.78% lower, and the Italian FTSE MIB index closed 0.78% lower.

Market Focus

1. Chancellor of the Exchequer David Hunt delivered his autumn financial report to the British Parliament; the Office for Budget Responsibility (OBR) judged that the UK is in recession.

2. Russia, Turkey and other parties agreed to extend the Black Sea food agreement for 120 days.

3. The Fed Bullard: the Fed's restrictive policy rate of 5% to 5.25% of the minimum level, inflation has so far only been “limited impact”, and “sufficiently restrictive” level may be the interest rate to rise to 5% to 7%.

4. Russian Deputy Foreign Minister Ryabkov said that Moscow does not want to break diplomatic relations with the United States, but if Washington does not think it needs to maintain relations with Moscow, then let nature take its course.

5. 35 members of the International Atomic Energy Agency Board of Governors adopted a resolution requesting Iran to urgently cooperate with the investigation of traces of uranium found in three undisclosed locations.

6. The final value of the Eurozone CPI annual rate in October recorded 10.6%, a record high.

7. Ukraine's prime minister said an explosion occurred at the country's gas production facility. Ukraine's state gas company reported damage to its facilities.

8. Russian diplomats: sanctions against Moscow led to a 38% reduction in Russian fertilizer exports from March to September.

Geopolitical Situation

Conflict Situation：

1. The Polish President stated that Ukraine's involvement in the investigation of the missile explosion on Poland's eastern border must be supported by international law. In addition, Ukrainian experts were allowed to visit the site of the missile crash in Poland.

2. Russian media: the explosion in Poland is due to one or two Ukrainian S-300 missiles “off track” caused.

3. The U.S. Department of Defense: there is no change in the current posture of U.S. forces in Poland.

4. U.S. Prime Minister said an explosion occurred at the country's gas production facility. The National Gas Company of Ukraine reported that its facilities were damaged.

5. According to the local government in Belgorod, Russia, the Sheberkino in the Belgorod region.

Energy Situation：

1. Austria will submit its energy windfall profits tax proposal on Friday.

2. The UK released its latest budget report, which mentions that the UK will impose a 45% tax on excess earnings from low-carbon energy producers; energy profits tax will be raised from 25% to 35%; and the average UK household energy bill will increase from £2,500 to £3,000 per year in the year starting next April. 

Other Situations:

1. Zelensky: A simple ceasefire is not enough, all threats to Ukraine must be eliminated.

2. Bank of Russia: the dollar is trading less against the ruble against the background of increased geopolitical risks and rising interest rates.

Institutional Perspective

1. Goldman Sachs：The dollar has room to appreciate by 3%.

2. SOCIETE GENERALE：Shorting the pound against the yen may be a more attractive trading strategy.

3. MUFG：A potential split in the U.S. Congress could hit the dollar.

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