MHM Today’s News

12 December 2022 - Fundamentals Reminder

☆ 15:00 The UK announced the monthly GDP rate in October, the monthly manufacturing output rate in October, the quarterly adjusted commodity trade account in October, and the monthly industrial output rate in October.

☆ EU sources said that EU foreign ministers planned to approve new sanctions against Russia and Iran at the meeting on December 12.

MHMarkets -Market Overview

Review of global market trend

Last Friday (December 9), the US PPI data exceeded expectations, reigniting fears of tightening, and the dollar index rose above the 105 level in the short term. However, after the release of the consumer inflation expectations surveyed by the University of Michigan, the dollar index gave up most of its gains, and ultimately failed to regain the 105 level, rising 0.11% to 104.93.

The US treasury bond yield rose to a new day high in the session, and the 10-year US treasury bond yield climbed to 3.59%, more than 10 basis points higher than the mid September intraday low set last Wednesday; The yield of two-year US bonds topped 4.35%.

Spot gold broke through the 1800 mark in the session, rising to 1806.05 USD/oz at the highest level, but failed to close above the 1800 mark, rising 0.47% to 1797.46 USD/oz; Spot silver rose as high as $23.68 per ounce, closing 1.75% higher at $23.48 per ounce.

International oil prices fell by more than 10% last week, the first time in nearly half a year. The price difference of 1-year WTI crude oil futures shifted to premium for the first time since November 2020. Russian President Vladimir Putin said on Friday that Russia will not export oil to countries that impose price limits on it. This news made the international oil price rise significantly in the session, and the US oil price rose by 2% at one time.

After the PPI data was released, the three major U.S. stock indexes opened at a low price. The University of Michigan survey showed that after the unexpected decline of short-term inflation expectations in the United States, the three major U.S. stock indexes rose in the session, but the decline widened in the late afternoon, and finally closed down, with the Dow closing 0.9% lower, and the Nasdaq and the S&P 500 closing 0.7% lower. The energy and Chinese new energy vehicle sectors fell generally, with the ideal vehicle closing down 12.37% after the performance.

European stocks generally gained, with Germany's DAX30 index up 0.73%, Britain's FTSE 100 index up 0.07%, France's CAC40 index up 0.46%, Europe's Stoxx 50 index up 0.51%, Spain's IBEX35 index up 0.77%, and Italy's FTSE MIB index up 0.30%.

Market Focus

1. More than 250 people are dealing with a major U.S.-Canada oil pipeline spill.

2. South Africa implements massive power restrictions again as president says sabotage is possible.

3. Saudi National Bank announced the completion of an investment deal in Credit Suisse's investment banking unit, with a 9.88% stake.

4. Options betting on a sell-off of German government bonds tripled in the past two weeks as European bond market rallies began to falter.

5. Kosovo police and Serb firefight escalated the situation, Serbia wants to send troops to Kosovo.

6. Saudi Energy Minister: OPEC+ will focus first on market stability in the coming year.

7. Pakistani security forces official: Afghan interim government border forces used heavy weapons to fire on Pakistani border posts.

Geopolitical Situation

Conflict Situation：

1. The Russian 2B11 mortar company destroyed a command post of the Ukrainian Army in the direction of Zaporozhye, carried out fire strikes against the enemy's assembled forces and technical equipment.

2. Over the past 24 hours, the Ukrainian Armed Forces repelled Russian attacks near 11 settlements in Donetsk and Luhansk, and struck Russian command posts and troop clusters.

3. The Ukrainian Defense Industry Group said that the Ukrainian Armed Forces will soon receive a new type of drone.

4. Ukraine fired missiles at Russian-controlled Melitopol, and there were multiple explosions in Donetsk and Crimea.

5. The U.S. Defense Department acquiesced to Ukraine's long-range attacks on targets in Russia, British media said. The White House says the U.S. did not force Ukraine to conduct operations on Russian territory.

6. The Donetsk side says the Ukrainian army lost more than 40 people, three tanks and five armored vehicles and automotive equipment over the past day and night.

7. An explosion was heard on the left bank of the Dnieper River in the Ukrainian capital Kiev, but no air defense siren was sounded at the time of the explosion.

8. Kremlin spokesman: Russia's concerns about the Minsk agreements were ignored, which became one of the premises for Russia's special military operation in Ukraine.

Assistance Situation:

1. Ukraine will receive more weapons from Germany, including air defense systems, self-propelled howitzers, anti-aircraft tanks and ammunition, the country's new ambassador to Berlin said.

2. Bypassing Hungary, the EU Council agreed to provide Ukraine with an 18 billion euro loan and a 10-year concession period.

3. British media: U.S. Defense Department officials have made clear that they are seriously considering Kiev's request to buy longer-range U.S. weapons, including rockets and fighter-bombers that could launch more effective strikes against Russian territory or Crimea.

MHMarkets  

Institutional Perspective

01

Goldman Sachs

more bankers will be sent to Dubai to boost Middle East capital flows.

02

SOCIETE GENERALE

The Bank of Canada is expected to raise rates by 50 bps to 4.25%, a decision that may trigger subconscious buying of the Canadian dollar. The Bank of Canada is currently oscillating between a 25 bps and 50 bps rate hike, but we suspect that it may choose the latter after GDP growth in the third quarter beat expectations (thanks in part to strong exports).

03

MUFG

75 billion yen will be spent on modernizing the core system.

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