Mohicans markets：MHM Today News

☆ At 21:30, the United States will announce Initial jobless claims for the week to February 18. At present, the market expects that it will record 200,000, which was up from 190,000.

☆ At 0:00 the next day, the United States will announce the EIA crude oil inventory for the week to February 17, which is expected to increase by 1.233 million barrels. It is worth noting that the API data released this week once again exceeded expectations, and investors need to be alert to the possibility of EIA crude oil inventory exceeding expectations.

Market Overview

Review of Global Market Trend

On Wednesday, spot gold fell sharply in the US market, with a drop of more than $20, and fell below the 1830 mark, and finally closed down 0.53% at $1825.23 per ounce; Spot silver fell with gold and closed down 1.58% at $21.52 per ounce.

The US dollar index rose sharply, rising to a session high of 104.61 in the intraday, and finally closing up 0.34% at 104.52; The yield of 10-year US Treasuries remained at a high point, closing at 3.927%.

In terms of crude oil, the two oil continued their decline and expanded their decline in the US market. WTI crude oil fell 3.03% to $73.83 per barrel; Brent crude oil narrowly closed at $80 and closed down 2.76% at $80.26 per barrel. It is noteworthy that the oil price has declined for six consecutive days. In addition, in terms of natural gas, the price of natural gas futures in the United States fluctuated greatly. Its intraday price fell to $2 per million British heat for the first time since 2020, and then rose sharply by 9% in the US market.

The three major US stock indexes rose and fell, with the Dow index closing down 0.26%, the S&P 500 index closing down 0.16% and the Nasdaq closing up 0.13%. The real estate and energy sectors led the decline.

Most European stocks ended lower, with Germany's DAX30 index closing up 0.01% at 15399.89; The FTSE 100 index of the UK closed down 0.59% at 7930.63; The European Stoxx 50 Index closed down 0.18% at 4242.88.

Market Focus

1. Minutes of the February meeting of the Federal Reserve: a few officials tend to or might have supported a 50BP interest rate increase, and some officials believe that the policy position is not restrictive enough; Importantly, the overall financial situation is consistent with the degree of policy constraints implemented by FOMC. After the minutes were released, the market was almost fully pricing in a cumulative 75BP rate hike by June.

2. Ukraine seeks to establish a 100-kilometer security zone near the Russian-Ukraine border in 1991.

3. US home purchase loan applications fell to a 28-year low.

4. According to BNO news: Turkey's earthquake killed more than 50000 people in Turkey and Syria.

5. The Baltic bulk dry index rose 13.47%, hitting a three-week high.

6. The Federal Reserve of New Zealand raised interest rates by 50 basis points to 4.75%, in line with market expectations.

7. In 2022, the population of South Korea will naturally decrease by 120000, the largest in history.

8. The source said that Russia planned to cut the crude oil exports of its western ports by a quarter in February and March.

9. Japan's 10-year treasury bonds broke the yield ceiling for the second consecutive day, and the Bank of Japan launched an emergency bond purchase operation.

Geopolitical Situation

Conflict situation:

1. The General Intelligence Agency of the Ministry of Defense of Ukraine: The Russian army's large-scale offensive has begun, with the goal of reaching the administrative border of Donetsk and Lugansk before March 31.

2. Russian Deputy Foreign Minister Garuzin said that Russia was ready to achieve the objectives of special military operations through political and diplomatic channels. If the western countries and Kiev authorities lay down their weapons and stop shelling Russian cities, then negotiations with Ukraine might be held.

3. On the morning of the 22nd, an explosion occurred near the seaport of Mariupol, a city controlled by Russia, and the Russian army's ammunition depot there was attacked.

4. The Ministry of Defense of Russia reported that the Russian army had attacked the temporary residence of Ukrainian foreign mercenaries in the Donetsk region, and also continued to eliminate some Ukrainian soldiers in Kupiyansk, Zinchman and South Donetsk. The General Staff of the Ukrainian Armed Forces said that the Ukrainian Air Force had repeatedly attacked Russian personnel, equipment concentration areas and air defense system positions. At the same time, the Ukrainian army also repelled the Russian attack near seven settlements in Donetsk and Lugansk.

5. Medvedev: If the United States wants to destroy Russia, it has the right to use any weapons to defend the country, including nuclear weapons.

Sanctions situation:

1. Russia's Izvestia newspaper quoted the head of the Russian Journalists Union as saying that the membership of the Russian Journalists Union in the International Journalists Union was suspended.

2. Zelensky submitted a draft to approve sanctions on Russian financial institutions for 50 years.

3. The European Commission said that it would hold two high-level meetings in Brussels on February 23 to discuss sanctions against Russia with member States and international partners. However, no agreement was reached on the 10th sanctions plan against Russia, and negotiations will continue on Thursday.

4. Foreign Minister of Hungary: Nuclear energy should not be included in the scope of EU sanctions. Hungary opposes the sanctions imposed by the European Union on the Russian National Atomic Energy Corporation (Rosatom), which will harm Hungary's interests.

Assistance situation:

1. On the 22nd local time, Spanish Defense Minister Rovers announced that the country would provide Ukraine with six “Leopard 2” tanks.

2. The British Defense Secretary Ben Wallace said that the United Kingdom had begun to “warm up” its weapons production line to replace weapons delivered to Ukraine and increase the production of artillery shells.

Institutional perspective 

01

Goldman Sachs

Goldman Sachs: It is expected that the European Central Bank will raise interest rates by 25 basis points in June 2023, raising the expected terminal interest rate from 3.25% to 3.5%.

02

SOCIETE GENERALE

[SOCIETE GENERALE: The European Central Bank may raise interest rates further to boost the euro]

Societe Generale said that the European Central Bank may further raise interest rates significantly to curb inflation, thus boosting the euro. Olivier Korber, foreign exchange strategist at Societe Generale, said in a report that the risk of recession in Europe and the tight labor market should maintain the upward risk of core inflation. Economists at the bank still expect the European Central Bank to further tighten its policy significantly. The European Central Bank will suspend interest rate increases only when the economy is on a more sustainable path of inflation. Korber said that due to the cautious attitude of the market, the peak interest rate expectation may be repriced higher.

03

MUFG

[MUFJ: If UK inflation is further cooled, the decline of sterling may increase]

MUFJ said that the pound would face further decline if the data to be released showed that British inflation would cool down further before the next policy meeting of the Bank of England. Derek Halpenny, an analyst at MUFJ, said Wednesday's data showed that inflation in the UK slowed more than expected in January, indicating that the Bank of England may suspend the interest rate increase cycle in March. Halpenny pointed out that after the release of the UK employment data on Tuesday, the market fully digested the expectation of a 25 basis point interest rate increase in March, but now it has dropped to 80%. If the inflation data in February slows down further, the interest rate is expected to have “ample space” to fall further, which will put pressure on the pound.