Mohicans markets：MHM Today News

☆ 10:00 China's annual rate of total retail sales of consumer goods in January and February, China's annual rate of added value of industries above designated size in January and February, the State Information Office held a press conference on the performance of the national economy

☆ 15:00 German current account without quarterly adjustment in January

☆ 15:45 French monthly CPI rate in February

☆ 17:00 IEA releases the monthly crude oil market report

☆ 18:00 Monthly rate of industrial output in the euro area in January

☆ 20:00 The 33rd “March 15” party was held

☆ 20:30 The monthly retail sales rate in February, the annual and monthly PPI rate in February, the manufacturing index of the Federal Reserve of New York in March, and the British Finance Minister Jeremy Hunt delivers his budget report

☆ 22:00 US NAHB real estate market index in March, US commercial inventory monthly rate in January

☆ 22:30 EIA crude oil inventory and EIA strategic oil reserve inventory for the week from the United States to March 10

Market Overview

Review of Global Market Trend

The CPI data in February released last night met expectations, but the core service inflation excluding housing hit a five-month high. The market renewed its bet that the Federal Reserve would raise interest rates by 25 basis points. The dollar index was boosted and once returned to the 104 level. However, the US stock market nearly wiped out all the gains in the end of the day, closing up 0.01% at 103.69.

The yield of US Treasuries rebounded, and the yield of 2-year US Treasuries rose by 37 basis points at one time. As of the closing of US equities, the trading volume was around 4.26%; The yield of 10-year US Treasuries rose 17 basis points to 3.69%, getting rid of the five-week low, and the yield of two-year US Treasuries stopped falling for three days.

The spot gold was suppressed by the rebound of the US bond yield. It once missed the US $1900 mark, falling to US $1895.28/ounce at the lowest level, and then recovered some of the lost ground, but it still stopped rising four times, closing down 0.51% at US $1903.86/ounce. Spot silver fell to US $21.47/ounce, closing 0.52% lower at US $21.68/ounce.

As the OPEC monthly report predicts a slowdown in demand in the short term, it is expected that there will be a moderate oversupply in the second quarter, and the international oil price will fall under pressure. WTI crude oil once fell to 70.76 US dollars, closing down 4.3% at 71.44 US dollars/barrel; Brent crude oil fell to $76.85/barrel, closing down 3.92% at $77.49/barrel. The US oil and Brent oil fell sharply for two consecutive days, and both closed at a new low in three months.

European natural gas continued to fall. The Dutch TTF natural gas futures, the European benchmark, fell more than 11% in the intraday, and ICE UK natural gas futures fell more than 12% in the intraday, both taking back more than half of the gains since last Thursday.

The three major US stock indexes rebounded across the board, with the Dow Index up 1.05%, the Nasdaq Index up 2.14% and the S&P 500 Index up 1.67%. Regional banks rebounded, with the Western Pacific Union Bank up nearly 34%, the First Republic Bank up nearly 28%, and the Alexis West Bank up more than 14%. Market panic still lingers, with the Chicago Board of Options Exchange (CBOE) panic index rising 7.5% to 30.23% in the opening session.

The European stock market ended higher, the DAX30 index in Germany ended up 1.82%, the FTSE 100 index in Britain ended up 1.21%, the CAC40 index in France ended up 1.86%, the Stoxx 50 index in Europe ended up 2.06%, the IBEX35 index in Spain ended up 2.27%, and the FTSE MIB index in Italy ended up 2.37%.

Market Focus

1. The U.S. military said that Russian warplanes intercepted and shot down the U.S. drone in the Black Sea; Russia denied: the U.S. drone transponder shut down, drastic maneuvering caused itself out of control, did not make contact with the drone; the Russian ambassador to the United States said that it does not seek confrontation with the United States.

2. U.S. February CPI rose 6%, and the rate of increase fell for the eighth consecutive month.

3. The disturbance of Silicon Valley Bank：

① Moody: The business environment of the U.S. banking system is “rapidly deteriorating” and the outlook has turned negative.

② U.S. Senate Banking Committee Chairman: The Fed should strengthen the regulation of banks and suspend interest rate increases.

③ U.S. Democrats seek to put more banks on the “too big to fail” requirement list to prevent a repeat of the SVB incident.

④ The U.S. Department of Justice and the SEC are investigating Silicon Valley Bank's disclosures and executive transactions.

⑤ The U.S. side is soliciting interest in a potential tender offer for the sale of Signature Bank.

⑥ Credit Suisse said it has identified “material weaknesses” in its reporting process for fiscal years 2022 and 2021 and is taking remedial action.

⑦ U.S. bank stocks rebounded, with the KBW Bank Index closing up 3.2% and First Republic Bank closing up 27%.

⑧ Federal Reserve Governor Bowman: the U.S. banking system remains resilient and has a solid foundation.

4. Black Sea grain outbound agreement to be extended by 60 days.

5. Recession looms, Argentina inflation breaks 3-digit for the first time in 30 years.

6. Saudi Energy Minister said “no oil will be sold to any country that sets price caps on Saudi oil supplies” and will stick to the existing OPEC+ agreement until the end of the year.

7. Open AI released GPT-4, a next-generation AI text model: able to beat 90% of humans on the bar exam, a figure that was only 10% in version 3.5.

Geopolitical Situation

Conflict Situation：

1. According to RIA Novosti, sources on the scene say that Russian troops have taken control of a site at the Artemovsk Non-Ferrous Metal Processing Plant (AZOM).

2. Russian Defense Ministry: Russian Defense Minister Shoigu ordered to double the production of high-precision rockets; Kiev lost about 170 servicemen a day in the direction of Kupyansk and Red Liman.

3. Zelensky: Senior commanders agreed to continue defending the Bakhmut region.

Energy Situation：

1. U.S. Assistant Secretary of the Treasury: About 75% of Russian seaborne oil is sold outside the price cap.

2. EU Energy Commissioner: We will soon propose to extend the voluntary gas demand reduction measures of EU member states beyond this winter.

3. Russian media: EU gas spending in 2022 plunged more than two times to 208 billion euros, including a six-fold increase in spending on the United States.

4. OPEC monthly report: updated forecast for Russia's oil and condensate production in 2023, which is expected to decrease by 700,000 barrels per day to 10.3 million barrels per day.

Assistance Situation：

1. Polish Prime Minister: Poland may supply MiG fighters to Ukraine in the next 4-6 weeks.

2. According to Politico: 8 U.S. senators pressured the U.S. Department of Defense to provide F-16s to Ukraine.

3. Dutch Defense Minister: The Netherlands will send radar to Ukraine to detect drones and send ships to detect and destroy mines.

Institutional Perspective

01

Goldman Sachs

【Goldman Sachs: EU's Green Deal Industrial Plan to Promote Renewable Energy】

March 14, Goldman Sachs analysts said in a report that the EU's Green Deal Industrial Plan legislation will change the current rules of the game, which will support the development of domestic supply chains for renewable energy and clean energy equipment. The plan, which aims to facilitate financing and improve regulatory and licensing procedures, is seen as the EU's response to the U.S. Inflation Reduction Act, an unprecedented subsidy program proposed by President Joe Biden to promote climate-related activities. Pure renewable energy developers such as Portugal's EDP Renovaveis and Spain's Solaria, as well as manufacturing companies such as Meyer Burger and Vestas, will be the main beneficiaries of the program, Goldman Sachs said.

02

SOCIETE GENERALE

【Societe Generale: ECB Unlikely to Make Surprise Policy Next Week】

March 10, Societe Generale interest rate strategists wrote in a report that the ECB is not expected to make many market surprises in terms of monetary policy decisions, and the market's reaction is expected to depend on the hawkishness of Lagarde's press conference. In line with general market expectations, Societe Generale expects the ECB to raise interest rates by 50 basis points next week, bringing the deposit rate to 3.00%.

03

MUFG

The Bank of Japan is expected to keep its original policy unchanged. Although there is a risk of exceeding expectations, the yield target will be adjusted by the next governor, and adjustments may be made at the June meeting.