MHMarkets：September 21, 2023--Fundamental Reminder

☆At 15:30, the SNB announces its interest rate decision, and the market expects it to raise rates by another 25 basis points;

At 16:00, SNB Governor Jordan will hold a press conference on monetary policy.

☆At 19:00, the BOE will publish its interest rate decision and minutes, with markets expecting a 25 basis point hike.

☆20:30 USD Initial Jobless Claims (SEP/16) & USD Current Account (Q2) & USD Philadelphia Fed Manufacturing Index (SEP)

Markets are expecting 225,000 claims.

☆At 22:00，ECB President Lagarde speaks, and investors can watch for her views on the ECB's next policy path.

☆22:00 USD Existing Home Sales (AUG) & USD CB Leading Index MoM (AUG)

Market Overview

Review of Global Market Trend

The dollar index fell and then rose on Wednesday, falling below 105 and hitting an intraday low of 104.66, before recovering all its losses and turning positive to end up 0.11% at 105.32. In U.S. Treasury yields, the two-year yield stood at 5.1% to close at 5.171%. The yield on the 10-year Treasury note rose to a session high of 4.411% before closing at 4.399%.

Spot gold went on a rollercoaster ride as the Fed's dot plot was more hawkish than expected, rising to an intraday high of $1947.48 before giving up all its gains and falling, threatening to hold on to the $1,930.32 mark, before settling down 0.05% at $1,930.32 an ounce. Spot silver moved in line with gold and closed up 0.16% at $23.24 an ounce.

Oil continued its downward trend, with WTI crude continuing to fall more than 1%, losing the $90 mark and falling to an intraday low of $88.93 in European trading before closing down 1.63% at $89.19 a barrel. Brent crude settled down 1.27% at $93.14 a barrel.

The three major U.S. stock indexes closed down broadly, with the Dow Jones Industrial Average down 0.22%, the Nasdaq down 1.53% and the S&P 500 down 0.94%. Xpeng Motor extended its decline, closing down 6.5%; Nio climbed 3% after tumbling 17%.

European stocks closed in the red across the board, with Germany's DAX30 up 0.75%, Britain's FTSE 100 up 0.93% and Europe's Stoxx 50 up 0.78%.

Market Focus

1. The Federal Reserve kept interest rates unchanged at 5.25%-5.5%. The hawkish dot plot predicted one more interest rate hike this year and a 50BP cut next year, significantly raising the expected trend of the US economy this year. Mr. Powell continued to leave the door open to potential rate increases and said a soft landing was a reasonable prospect.

2. As of this morning, interest rate futures are pricing in a 30% chance that the Fed will raise rates in November, with the first cut coming in September and the rate ending next year at 4.76%.

3. Russian media: Russia may impose a new export tax pegged to the ruble.

4. Armenia claimed that Azerbaijan shelled the Armenian front in the evening, but the Afghan side said the information was untrue.

5. Goldman Sachs: Raised its Brent crude oil price forecast to $100 / BBL over the next 12 months.

6. House Speaker Kevin McCarthy: House Republicans are 'very close' to agreement on short-term spending bill

7. Indian media: Saudi Arabia has cut the premium on oil exports to India to $3.50 per barrel from around $10 per barrel last year.

8. Tensions between Poland and Ukraine over trade in agricultural products have escalated as Poland's prime minister said he would no longer supply arms to Ukraine.

9. Tokyo Stock Exchange, Japan: Extending the trading hours from 3 p.m. to 3:30 p.m. local time effective November 5, 2024.

10. Pressured by the Fed's hawkish stance, gold erased intraday gains of more than $17 and the Nasdaq closed down more than 1.5%. The dollar surged higher, with Treasuries topping 4.4% at 10Y and 5.18% at 2Y.

Geopolitical Situation

Conflict Situation

1. Ukraine's Krymenchuk oil refinery halted operations after a Russian drone strike.

2. Ukrainian military: In overnight attacks, 17 of 24 Russian drones were shot down.

3. Russia shot down a drone over Sevastopol, according to RIA Novosti.

4. Market news: Ukraine's military said it attacked the command of Russia's Black Sea fleet in Crimea. 

Institutional Perspective

01

Goldman Sachs

Goldman Sachs：Raised its next 12 month Brent crude oil price forecast to $100 / BBL.

02

SOCIETE GENERALE

SOCIETE GENERALE: The Fed is expected to hold fire, but the dot plot may show one more rate hike this year, followed by a steady decline, and the tone of the statement is definitely hawkish.

03

MUFG

MUFG：Watch for how much the Fed emphasizes the possibility of another rate hike this year and whether it signals the risk of an upward shift in the median rate in 2024.