MHMarkets ：September 22, 2023--Fundamental Reminder

☆7:30 JPY Core Inflation Rate YoY (AUG)

It is now expected to remain above the BOJ's 2% target at an annual rate of 3%.

☆At 11:00, the BOJ announces its interest rate decision, and the market expects the BOJ to continue to “stand still”. At 14:30, the BOJ Governor Kazuo Ueda will hold a press conference on monetary policy.

☆At 20:50, Fed governor Lisa Cook speaks.

☆21:45 USD Markit Manufacturing PMI Flash (SEP) & USD Markit Services PMI Flash (SEP)

☆The next day at 1:00, San Francisco Fed President Daly speaks on the outlook for monetary policy and the economy. At the same time, this year, the Voting Committee and Minneapolis Fed President Kashkari speaks.

Market Overview

Review of Global Market Trend

On Thursday, the dollar index retreated slightly but was still near a six-month high of 105.74 before giving up all its gains and turning negative to end down 0.06% at 105.38. In terms of US Treasury yields, the two-year US Treasury yield rose first and then fell, once spiking above the 5.2% mark at the opening, and then falling back in shock to close at 5.144%. The yield on the 10-year Treasury rose sharply and briefly approached 4.5% before closing at 4.494%.

Spot gold fell below $1,920 and fell to an intraday low of $1,913.97 before the US market was “suppressed” by US Treasury yields. It finally threatened to defend the $1,91920 mark and closed down 0.53%, closing the daily line at $1,920.08 / ounce. Spot silver followed a V-shaped pattern, falling to an intraday low of $22.81 before recovering all its losses and turning positive to end up 0.7% at $23.4 an ounce.

Crude oil fluctuates to the upside, with WTI crude falling to an intraday low of $88.34 in European trading before climbing back above the $90 mark, but failing to hold ground and ending up 0.38% at $89.53 a barrel. Brent crude settled up 0.04% at $93.19 a barrel.

All three major U.S. stock indexes opened lower under pressure, with the Dow Jones Industrial Average down 1.08%, the Nasdaq down 1.82% and the S&P 500 down 1.64%, its biggest one-day drop in nearly half a year. The Nasdaq China Golden Dragon Index fell 1.9%, with NIO closing down 4% and Alibaba falling nearly 2%. Amazon fell more than 4%, while Nvidia and Tesla fell more than 2%.

European stocks closed in the green across the board, with Germany's DAX30 index down 1.33%, Britain's FTSE 100 index down 0.69% and Europe's Stoxx 50 index down 1.48%.

Market Focus

--Source：jin10&Bloomberg

NEWS

1. Russia imposed a ban on gasoline and diesel exports for an unknown length to stabilize the domestic market. The two types of energy exports amount to about 1 million barrels a day, the data show.

2. 92-year-old media mogul Rupert Murdoch is retiring and his eldest son is taking over.

3. The floor leadership of the main opposition party, the Minjoo Party, resigned.

4. Republicans in the U.S. House of Representatives have failed to advance a defense spending bill for the third time, adding urgency to the government shutdown.

5. Chevron agreed to a deal proposed by Australian regulators to end a strike at a key gas export facility while unions continue to review the plan.

6. The Bank of England left its benchmark interest rate unchanged at 5.25% by a narrow vote, against market expectations of a 25 basis point increase and leaving the door open to further increases.

7. Us Treasury 10Y rose 14BP, global stock markets fell yesterday, the Nasdaq fell more than 1.8%, the S&P 500 index hit the biggest decline in nearly half a year, 2023 emerging market stock index gains were wiped out.

Geopolitical Situation

Conflict Situation

1. Russian Defense Ministry: Russia attacked the Pepsi plant near Kyiv.

2. Ukraine's military confirmed that Ukrainian armed forces attacked a Russian air base in Crimea.

3. Russia-backed officials in Crimea say Russia shot down all Ukrainian missiles that tried to attack an airport in Crimea.

4. State Grid operator: Russian missile strikes have damaged energy infrastructure in central and western regions; Five regions face partial power shortages.

5. In the early hours of the morning, Russian forces used long-range airborne high-precision weapons and attack drones to carry out cluster strikes on Ukrainian military facilities, radio technology reconnaissance centers and sabotage group training centers, the Russian Defense Ministry said. Russian forces are hitting Ukrainian personnel and weapons such as howitzers and armored vehicles in Kupiansk, Dijman, Donetsk and Zaporizhzhia. Russian air defense forces intercepted five “Storm Shadow” missiles and shot down 75 Ukrainian drones.

6. The General Staff of the Armed Forces of Ukraine issued a war report stating that the Ukrainian army continued its offensive operations in the direction of Melitopol and Bakhmut. There have been 20 battles between Ukrainian and Russian forces on the front lines in the past 24 hours. The regions of Sumy, Chernihiv, Kharkiv, Zaporizhzhny and Kherson have been hit by Russian artillery and missiles. Ukrainian air, missile and artillery units pounded Russian targets, including command posts, personnel and equipment concentration areas.

Assistance Situation

1. The Polish president said that arms could still be supplied to Ukraine in the future, and the two sides agreed to negotiate a solution to the food import ban.

2. Ukrainian Finance Ministry: Ukraine has received $1.25 billion from the United States.

3. Ukrainian President Zelensky: The United States will help Ukraine strengthen its air defense capabilities over the winter, and the two sides agreed on actions to expand Ukraine's food exports.

4. Biden: Approved the next tranche of U.S. aid to Ukraine, $325 million, with the first U.S. Abrams tanks to be delivered to Ukraine next week.

5. During Zelensky's visit to Washington, 23 Republican members of the House of Representatives and six senators signed a letter warning against the White House's aid to Ukraine, according to the Wall Street Journal.

Food Situation

1. The EU has written to Poland, Hungary and Slovakia to represent them at the WTO in their trade disputes with Ukraine.

2. The Ministers of Agriculture of Ukraine and Poland agreed to find a solution to the issue of the food import ban in the interests of both countries.

3. Slovak Ministry of Agriculture: The Ukrainian Minister of Agriculture agreed to terminate the case against Slovakia at the WTO; The two sides agreed to establish a licensing system for grain trade; The Slovak import ban on Ukraine will remain in force until the system is established.

4. Ukrainian media: The first ship carrying Ukrainian grain arrived in Turkey on the 21st after the termination of the agreement on the export of agricultural products in the Black Sea.

5. According to the Interfax news agency, Russia will not buy the surplus grain for storage, but will export it.

Institutional Perspective

01

Goldman Sachs

Goldman Sachs：BOE interest rates may have peaked.

02

SOCIETE GENERALE

【SOCIETE GENERALE：A rate hike will not be enough to prevent GBP/USD from losing 1.20 in due course】

Sep 21 – Societe generale chief global FX strategist Kit Juckes said a 25 basis point rate hike by the BOE is justified as weak inflation is not enough to offset strong wage growth and tightness in the Labour market. If the BOE does raise rates, the GBP slide may get some relief, but not enough to prevent GBP/USD from falling below 1.20 in due course.

03

MUFG

MUFG：The main risk for the US dollar is whether the Fed will take the last rate hike off the table.