Mohicans markets：MHM Today’s News

December 6, 2022-Fundamental Reminder

☆ 11:30 The Australian Federal Reserve announces its interest rate resolution.

☆ 23:00 U.S. releases the New York Fed Global Supply Chain Stress Index for November.

☆ The following day 01:00 EIA releases its monthly short-term energy outlook report.

☆ The following day 05:30 U.S. releases API crude oil inventories for the week ending Dec. 2.

MHMarkets -Market Overview

Review of Global Market Trend

On Monday, December 5, a number of better-than-expected U.S. data reinforced expectations that the Fed would keep tightening, and the dollar index rebounded to above 105, closing up 0.75% at 105.29. Non-dollar currencies continued to fall, with AUD/USD down 1.50% during the day, USD/CAD up to 1.36, EUR/USD down 1.05, USD/JPY up 1.50% during the day, both offshore and onshore RMB recovered 7.0 level.

U.S. bonds extended their intraday decline, with the 2-year U.S. bond yield rising to a maximum of 4.42% and closing trading near 4.4%; the 10-year U.S. bond yield touched 3.61%, which was up more than 10 basis points. The inversion of the U.S. 2-10 year Treasury yield reached 81.8 basis points, which was the largest inversion since 1981.

Spot gold fell below $1,770 per ounce, and spot silver fell more than 4% intraday. By the close of trading, spot gold closed down 1.61% at $1,768.82 per ounce, while spot silver closed down 3.87% at $22.25 per ounce.

Crude oil continued to fall after rising more than 3% intraday, with WTI crude once plunging 4% to close down 3.56% at $77.35 per barrel; Brent crude lost $84 per barrel to close down 3.35% at $83.02 per barrel. U.S. natural gas fell more than 11 percent to a new low of more than a month.

U.S. stocks opened lower, extending losses after Russia accused Ukraine of attacking a Russian military airport. By the close of trading, the Dow Jones closed down 1.40%, the S&P 500 closed down 1.79% and the Nasdaq Composite Index closed down 1.93%. The energy and finance sectors were the top losers, with Tesla closing down 6.37%.

European stocks generally closed lower, Germany's DAX30 index closed down 0.56%, the FTSE 100 index closed up 0.17%, France's CAC40 index closed down 0.67%, the European Stoxx 50 index closed down 0.53%, Spain's IBEX35 index closed down 0.13%, and Italy's FTSE MIB index closed down 0.29%.

Hot Spots in the Market

1. The strong US ISM non manufacturing PMI and other data triggered the market's concern about the Fed's interest rate hike. The Nasdaq Composite Index gave up its gains last week on Monday, and the 2Y/10Y upside down deepened to 82BP. The market expected the Fed's terminal interest rate to return to 5%, about 10BP higher than the previous trading day.

2. The EU and the United States committed to resolving the differences on subsidies in the “Inflation Reduction Act”.

3. Bank for International Settlements: According to the off balance sheet report, the foreign exchange swap position shows that the hidden US dollar debt exceeds 80 trillion US dollars.

4. Saudi Arabia lowered the price of most oil sold to Asia in January to 3.25 dollars per barrel of premium.

5. American Energy Security Envoy Hochstein: There is still enough strategic oil reserves to deal with emergencies.

6. Financial Times: The UK has finalized the regulatory plan for the cryptocurrency industry.

7. The Biden government will hold an online meeting with American oil executives on December 8 to discuss how to support Ukraine's energy infrastructure. The US Energy Secretary will meet with many oil company executives on the 14th.

8. Russian Ministry of Defense: Two military airports in Russia were attacked by Ukraine, causing 3 deaths and 4 injuries. A few hours later, Ukraine reported that Russia had launched a new round of missile attacks.

Geopolitical situation

Conflict situation:

1. Russian Ministry of Defense: two military airports in Russia were attacked by Ukraine, causing 3 deaths and 4 injuries; A few hours later, Ukraine reported that Russia had launched a new round of missile attacks; Ukrainian officials said Ukraine used drones to attack two bases in central Russia.

2. The Donetsk side said that Uzbek troops shelled Donetsk territory 34 times in the past day and fired more than 150 rounds of ammunition.

3. Ministry of National Defense of Ukraine: Russian missile attacks have disrupted the process of redeployment of Ukraine's armed forces reserves, foreign weapons, military equipment and ammunition to the operational areas by rail.

4. Moldova found a missile falling on its border with Ukraine.

5. The Governor of Kiev, Ukraine: Some infrastructure in the region was hit by Russian missiles, and 40% of the places had no electricity, but there were no “serious consequences”.

Energy situation:

1. The White House of the United States said that Biden would not consider using Russian oil to supplement strategic oil reserves.

2. The Kremlin: Russia is ready to respond to the introduction of an oil price ceiling by the West; Russia will not recognize the decision of the West.

3. Due to the fact that some power stations cannot operate at full load, coupled with cooling and other factors, there will be power shortage in the next day, so Ukraine will implement emergency power rationing measures.

4. Türkiye requires the tanker to re enter the risk, and tanker congestion occurs in the Türkiye Strait.

MHMarkets-Institutional Perspective

1. Goldman Sachs：The US Treasury may not be able to achieve its year-end cash balance target

2. SOCIETE GENERALE：The recent rebound in US debt may not indicate an improvement in the situation

3. MUFG：Bank of Canada may strengthen Canadian dollar weakness

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