MHMarkets：October 11, 2023--Fundamental Reminder

TBD Republicans in the U.S. House of Representatives have elected a speaker

16:15 Fed Governor Bowman speaks.

20:30 USD PPI YoY (SEP) & USD PPI MoM (SEP)

22:15 Fed Governor Waller Speaks

24:00 The EIA releases its Short-Term Energy Outlook report

The next day at 02:00 The Fed releases the minutes of its September monetary policy meeting

The next day at 04:30 USD API Crude Oil Stock Change (OCT/06)

Market Overview

Review of Global Market Trend

Overnight, Fed officials again issued a dovish note, with this year's hawkish member Kashkari saying higher yields could mean the Fed needs to slow the pace of rate hikes, and next year's member Bostic similarly saying there is no need to raise rates again unless the outlook changes. The dollar index fell as expectations of a Fed rate hike cooled, losing 106 and closing down 0.16% at 105.78.

In addition to the Fed's release of doFs, geopolitical conflicts also drove the market to buy US bonds as a haven, with yields across the board falling more than 10 basis points, with the 10-year Treasury yield falling 18 basis points to close near 4.65% and the two-year Treasury yield, which is more sensitive to monetary policy, falling 15 basis points to close near 4.97%.

Spot gold failed to achieve further gains, closing down 0.05% at $1,860.46 an ounce, with some analysts saying the rebound in European and US stock markets had affected prices. Spot silver settled down 0.24% at $21.83 an ounce.

Crude oil surged more than 4% on Monday before giving up some gains on Tuesday, with WTI crude down 0.5% at $85.91 a barrel and Brent crude down 0.71% at $87.09 a barrel.

The three major U.S. stock indexes closed up, with the Dow up 0.4%, the Nasdaq up 0.58% and the S&P 500 up 0.51%. Nasdaq China Golden Dragon Index rose 3.1%, Bilibili, which proposed a doubling of its daily activity target, closed up nearly 8%, NIO rebounded, NIO rose nearly 6%, Li Auto and XPeng Automobile both rose at the 4% line, and Alibaba closed up 2.7%.

Major European stock indexes rose across the board, with Germany's DAX30 up 1.95%, Britain's FTSE 100 up 1.81% and the Euro Stoxx 50 up 2.26%.

Market Focus

2. The Saudi Energy minister will participate in the Russian Energy Week on November 11.

3. IMF: Raised U.S. growth forecasts to 2.1% in 2023 and 1.5% in 2024; Global growth for 2024 was revised lower to 2.9%.

4. Fed officials release more doves. Mr. Bostic: Don't think we need to raise rates any more, but if the outlook changes, further increases may be needed; Kashkari: If the economy is more resilient, you may have to raise rates further. A potential rise in yields could mean the Fed has to act less, but if that's what the market expects, let's stay the course and deliver; Waller: It is very useful to draw on the “Taylor rule” in thinking about the appropriate monetary policy response needed to bring inflation back to 2%.

5. State Department Spokesperson Miller: The United States will continue to move forward with the normalization of Israeli-Saudi relations.

6. Us Congressional Budget Office: US annual deficit tops $1.7 trillion as interest rates soar

Institutional Perspective

01

Deutsche Bank

【Deutsche Bank：The last leg of inflation is usually the hardest to deal with. We must be alert to the lessons of 1970】

Deutsche Bank warned that inflation expectations could be unanchored in a similar way to the stagflation of the 1970s. A new surge in inflation could cause people's inflation expectations to become unanchored, or no longer under control, making the inflation problem even worse, according to the Deutsche Bank report.

02

WGC

【WGC: Gold is likely to face some volatility in the coming weeks and could offer potential gold buying opportunities】

Gold could face some volatility in the coming weeks as rising real yields, a stronger dollar and a booming economy hit investment demand in certain areas. But longer-term concerns and continued central bank buying should ensure the turmoil doesn't feed into a more severe downtrend, the report argued.

As such, this could present a potential gold buying opportunity for some investors. Historically, when the market (futures positions) have become overly short, gold has often signaled a pullback.

03

BlackRock

【BlackRockwarning: US bond bear market is not over, 'asset pricing' will continue in the fourth quarter】

The US bond market is in the midst of an unprecedented three-year bear market and the sell-off has further to run, according to blackrock, the world's largest asset manager.

The yield on the benchmark 10-year US Treasury note has risen more than fivefold since the end of 2020 as markets have been rattled by high inflation, a sharp spike in interest rates and fears of a sovereign debt crisis.