Mohicans markets：MHM Today News

☆ At 17:00, the European Central Bank announced the economic bulletin.

☆ At 21:30, the United States announced the number of people applying for unemployment benefits in the week to December 24, and EIA natural gas inventory in the week to December 23.

☆ At 24:00, the US announced EIA crude oil inventory and strategic oil reserve inventory in the week of December 23.

Market Overview

Review of global market trend

For a time, the US bond yield gave back the rise in the US stock market and turned down. In the afternoon, the US stock market's long-term bond yield turned up again, while the short-term bond yield kept falling. The yield of the 10-year US bond pushed down 3.80% and then rose above 3.89%. The yield of the two-year US bond fell to a minimum of 4.33%, and the closing price was around 4.35%.

Spot gold fell below the 1800 mark, closing 0.53% lower at 1804.3 US dollars/ounce; Spot silver fell 2.1% to US $23.54/oz.

The crude oil market pays attention to the demand prospect. The US and the Brent crude oil once fell by more than 3% during the day. WTI crude oil reached the daily low of US $77, closing 1.25% lower at US $78.82 per barrel; Brent crude oil closed 1.42% lower at USD 83.78/barrel. US natural gas futures fell more than 12% on Wednesday, hitting a new low since March this year, because the weather is expected to be warmer in the next two weeks than previously expected, which may lead to a decline in heating demand. European natural gas futures fell 7.4% to 76.78 euro/MWh, the lowest level in 10 months.

The three major US stock indexes collectively closed down more than 1%, the Dow closed down 1.10%, the Nasdaq and the S&P 500 closed down 1.35% and 1.22% respectively. Apple closed down about 3%, the lowest closing price since June 2021, and its total market value was close to the US $2 trillion mark. The NASDAQ China Golden Dragon Index closed 3.7% lower and Daily Fresh closed down more than 9% . Tesla ended the day with 7 consecutive losses and closed 3.3% higher.

Most European stocks ended lower, with Germany's DAX30 index closing 0.52% lower, Britain's FTSE 100 index closing 0.35% higher, France's CAC40 index closing 0.61% lower, Europe's Stoxx 50 index closing 0.67% lower, Spain's IBEX35 index closing 0.18% lower, and Italy's FTSE MIB index closing 0.35% lower.

Market Focus

1. European gas prices fell back to pre-Russia-Ukraine conflict levels.

2. Pinduoduo and Full Truck Alliance abandoned their plans to list in Hong Kong, The Information reported, citing sources.

3. Musk reassured employees not to be distracted by the stock price, believed Tesla will become the most valuable company in the world, and urged employees to do their best to complete quarter-end deliveries.

4. All three major U.S. stock indexes fell more than 1%, Apple shares fell to a new 18-month low, narrowly missing the $2 trillion market value.

5. Iran's foreign minister: the window to reach a deal in the Iranian nuclear negotiations “will not be open forever”.

6. Israel's defense minister: Israel has made further preparations to strike Iran's nuclear facilities.

7. U.S. State Department: The EU and the U.S. are concerned about the continuing tensions in northern Kosovo.

8. TC Energy announced at one point that the eastern Texas pipeline operation had suffered a force majeure, which was later announced to be lifted. The pipeline is one of the largest natural gas pipeline systems in the United States.

Geopolitical Situation

Conflict Situation：

1. Russia's Northern Fleet: The frigate Marshal Gorshkov has completed the final stage of operational preparations after several days of tests at the Northern Fleet's Barents Sea Training Range.

2. The Ukrainian side said that it plans to develop air-to-air combat drones.

3. Kremlin: the peace plan can be realized only if four new regions are considered to join Russia.

4. Russian Foreign Ministry: The number of cyber attacks against Russia has increased by 80% this year, with the state-owned sector bearing the brunt of the attacks.

Energy Situation：

1. European gas prices fell back to pre-Russia-Ukraine conflict levels.

2. Japan will import crude oil from Russia for the first time since May.

3. Gazprom: global gas demand is expected to fall by 65 billion cubic meters in 2022, including 55 billion cubic meters in the EU-27.

4. Kremlin: Russia has not consulted with OPEC+ on its response to the oil price cap; authorities analyzed the situation after the West imposed a price cap on gas and it is too early to talk about further measures.

5. German economy ministry spokesman: Russia's decree on halting oil exports has no impact on the German economy.

6. Russian Energy Minister: Russian electricity exports increased by 15% in 2022 compared to the data before the epidemic.

Food Situation：

1. Russian Ministry of Agriculture: 3 million tons of grain have been purchased through the “State Intervention Fund”, which will last until December 30 of this year (inclusive).

2. Rosstat: Russia's grain production will increase by 24.2% net weight to 150.7 million tons in 2022.

3. According to foreign media: Ukraine's grain exports amounted to 1.2 million tons in the week ending December 25, compared to 514,848 tons in the previous week, doubling the export volume from the previous week.

Institutional Perspective

1. Goldman Sachs：In his traditional year-end message to employees, Goldman Sachs CEO Solomon said the firm is looking at a new round of layoffs that will be announced in a few weeks. “We are carefully evaluating and, while still under discussion, expect to lay off employees in the first half of January,” Solomon said. “Multiple factors, including tighter monetary policy, are impacting the business environment and causing a slowdown in economic activity. For the company's leadership team, proactive planning in the face of adverse factors is the focus.”  People familiar with the matter said earlier this month that Goldman Sachs may consider laying off up to 8% of its workforce, possibly up to 4,000 people. 

2. SOCIETE GENERALE：As the Bank of Japan stimulates hedging, the yen's spike is just beginning.

Societe Generale said Tuesday's announcement by Bank of Japan Governor Haruhiko Kuroda to double the ceiling on 10-year government bond yields; the sudden policy adjustment shocked markets and also increased pressure on the country's international investors to hedge their foreign assets, which is expected to further push up the yen's exchange rate. Juckes, chief foreign exchange strategist at Societe Generale, said the dollar-yen exchange rate could fall to 125 in January next year as Japanese fund managers slowly adapt to the Bank of Japan's tougher stance, with the pair falling more than 3% on Tuesday, meaning the yen will rise another 6% from current levels in the future.

3. MUFG：The British pound has room for further weakness against the euro.

Mitsubishi UFJ Financial Group said the pound has room for further weakness against the euro, as the European Central Bank may tighten monetary policy more than the Bank of England next year. So far, the pound is still the third worst performing currency in the G10. On the other hand, so far this year, the euro has topped the performance of the G10 currencies, with only the dollar and the Swiss franc performing better than the euro. Considering the Russian-Ukrainian conflict and the current recession that the eurozone may be in, the euro's performance in the G10 currencies can be quite bright.