MHMarkets ：MHM Today News

☆Today, European Central Bank President Lagarde and Executive Director Panetta attended the World Bank and IMF spring meetings, and investors can pay attention to whether the two will disclose the pace of the ECB's subsequent interest rate hikes.

☆At 7:30 pm, the 2023 FOMC voting committee and Minneapolis Fed Chairman Kashkari will participate in an event held at the City Hall. Prior to this, Chicago Fed Chairman Gullsby became the first Fed official to suggest a pause in interest rate hikes. Investors need to pay attention to what signals Kashkari's speech will release.

☆At 20:30, the United States will release March CPI data. Currently, the market expects the overall inflation growth rate to be 5.2% year-on-year, and the core CPI growth rate to be 5.6% year-on-year.

☆At 21:00, Bank of England Governor Bailey will give a speech, and investors can pay attention to his views on the Bank of England's subsequent interest rate hike path. In addition, at 3:15 the next day, Bank of England Governor Bailey delivered a speech on price stability and financial stability.

☆At 22:00, the Bank of Canada will announce its interest rate resolution, and at 23:00, the Governor and Senior Vice Governor of the Bank of Canada will hold a monetary policy press conference.

☆At 22:30, the United States will announce its EIA crude oil inventory for the week, after an unexpected increase of 377,000 barrels of API crude oil. If the EIA inventory confirms signs of accumulation, it will have a bearish impact on crude oil.

☆At 2:00 the next day, the Federal Reserve will release the minutes of its monetary policy meeting, and investors can pay attention to the views of policy makers at that time on the path of future interest rate hikes and the banking crisis.

Market Overview

Review of Global Market Trend

On Tuesday, spot gold began to rise sharply from the Asian session, returning above the $2000 level and briefly reaching an intraday high of $2007.36, before closing 0.61% higher at $2003.67 per ounce. Spot silver rose with gold and stood above $25, eventually closing 0.72% higher at $25.05 per ounce.

Due to disagreements among Federal Reserve officials and the market's waiting for inflation data, the US dollar index may have fallen during the day, but it still remained above the 102 level, ultimately closing 0.39% lower at 102.15; The 10-year US Treasury yield slightly increased, closing at 3.432%.

Crude oil rose sharply before the US market, with WTI crude oil closing back at the $80 mark, up as much as 2% during the day. It ended up 1.95% higher at $81.432 per barrel, while Brent crude oil returned above $85 and ended up 1.54% higher at $85.50 per barrel.

The US stock index rose 0.29%, the Nasdaq fell 0.43%, and the S&P 500 index closed flat. Popular Chinese concept stocks have fluctuated, with NIO Motors up 5% and Bilibili up nearly 4%; Baidu and Alibaba closed 1.7% lower.

Most European stocks closed higher, with Germany's DAX30 index up 0.37%, the UK FTSE 100 index up 0.57%, France's CAC40 index up 0.89%, and the European Stoxx 50 index up 0.55%.  

Market Focus

1. Three FOMC voting members spoke-Williams: Policy has reached a restrictive level, and another rate hike is a reasonable starting point. If inflation falls, a rate cut will be needed; Goolsbee: In response to recent banking problems, the Fed should remain cautious about excessive rate hikes. The impact of a potential credit crunch could be equivalent to a rate hike of 25-75 BP; Harker: Data-driven decisions must be made with care to avoid excessive action. Banking stress is not over but has subsided.

2. IMF: global economic growth is expected to be 2.8% in 2023, 5.2% in China, 1.6% in the US, 0.8% in the Eurozone and 5.9% in India.

3. India announced the elimination of a 20% tariff on rice seed exports.

4. U.S. media: The Biden administration has begun to study the need for a review of artificial intelligence tools such as ChatGPT.

5. Italy declared a six-month state of emergency in response to a surge in illegal immigration.

6. LME lowered nickel margin from $6,100 per ton to $5,700 per ton.

7. New York Fed: The rate hike makes the Fed's interest rate cost high, resulting in the inability to pay profits to the Treasury for some time to come.

8. U.S. Energy Information Administration: raised the average price of U.S. and Bu oil this year to $85 and $79.2, respectively; OPEC production is expected to increase by 1 million barrels per day in 2024 after the production agreement expires at the end of the year.

Geopolitical Situation

Conflict Situation：

1. Russian Defense Ministry: Russian troops launched offensives in several directions, including Kupyansk, Red Liman and Donetsk, striking Ukrainian army personnel as well as tanks, armored vehicles and other equipment.

2. The General Staff of the Armed Forces of Ukraine informed that the Ukrainian forces repelled several Russian attacks in the direction of Bakhmut, Avdeyevka and others.

3. Head of the Wagner Group: 80% of the territory of Bakhmut is under control.

Assistance Situation：

1. Ukrainian Prime Minister arrives in Canada: he will meet with Canadian Prime Minister Justin Trudeau to prepare a new agreement on strengthening economic aid.

2. U.S. Treasury Secretary Yellen: IMF's Ukraine aid program will continue until September.

3. Canadian Prime Minister Justin Trudeau: Canada will send 21,000 assault rifles, 38 machine guns and 2.4 million rounds of ammunition to Ukraine.

4. Ukrainian President Zelensky announced on social media that he personally discussed aid to Ukraine with Howard Buffett (Warren Buffett's eldest son).

Energy Situation：

1. Russia exported diesel and gasoline by rail to Iran for the first time earlier this year, according to sources.

2. Hungarian Foreign Minister: Russian Deputy Prime Minister Novak assured that there will be no interruptions in the supply of Turkish Stream pipeline.

Institutional Perspective

01

Goldman Sachs

【Goldman Sachs Partner: U.S. March CPI May Break U.S. Stock Quiet】

On April 12, Goldman Sachs partner John Flood said in a report Tuesday that the S&P 500 is expected to fall at least 2% if the annual U.S. March CPI rate is higher than the previous level of 6%. If the CPI is at 5.1% or even lower, U.S. stocks could move higher. Investors would prefer softer economic data because strong economic data would add more confusion/uncertainty to the Fed's future actions. “Did the Fed raise rates again in May but then cut them sharply in the fourth quarter？ That's what the federal funds rate futures are currently pricing in.”

02

SOCIETE GENERALE

【Societe Generale: The Bank of Korea is expected to keep interest rates unchanged at 3.5%】

On April 10, Societe Generale economists believe the Bank of Korea is expected to keep interest rates unchanged at 3.50% due to falling inflation levels and concerns about economic growth sparked by banking problems in Europe and the United States. Banking problems have sparked concerns among some in Korea about overseas capital flows, though these concerns have eased recently. Some recent activity data suggest that economic conditions are resilient. While the policy statement will likely reaffirm that the Bank of Korea will maintain its tightening stance, leaving the policy rate unchanged for the second consecutive meeting would further support our underlying assumption that the rate hike cycle ended in January.

03

MUFG

Mitsubishi UFJ: Dollar could fall sharply if U.S. jobs data comes in weaker than expected

On April 5, The dollar could fall sharply if Friday's weaker-than-expected U.S. nonfarm payrolls report supports growing evidence that positive labor market demand is starting to wane, Mitsubishi UFJ said. Mitsubishi UFJ analyst Derek Halpenny said the data collection for the jobs report comes ahead of the banking sector turmoil in March, which could lead to a further tightening of credit conditions and hit real economic activity. The best performing area of the U.S. economy remains the labor market, but we may be on the cusp of change, Halpenny said, adding that the dollar could be most affected against the core G10 currencies, including the Swiss franc, yen, euro and pound, if Treasury yields fall further as the job market cools.