MHMarkets：October 12, 2023--Fundamental Reminder

TBD Opec releases its monthly crude oil market report.

16:00 IEA publishes its monthly crude oil market report.

19:30 ECB publishes minutes of its September monetary policy meeting.

20:30 USD Inflation Rate YoY n.s.a (SEP) & USD Inflation Rate MoM s.a (SEP) & USD Core Inflation Rate YoY n.s.a (SEP) & USD Core Inflation Rate MoM (SEP) & USD Initial Jobless Claims (OCT/07)

23:00 USD EIA Crude Oil Stocks Change (OCT/06) & USD EIA Oklahoma Cushing Crude Oil Stocks Change (OCT/06) & USD EIA Strategic Petroleum Reserve Stocks Change (OCT/06)

Market Overview

Review of Global Market Trend

Fed meeting minutes released early on Thursday showed the Fed will keep interest rates high for “some time”, but hawkish Fed Governor James Waller and Atlanta Fed President Raphael Bostic both continued their recent dovish stance, with markets betting there is a less than 9% chance of a rate hike in November. The dollar index fell, closing down 0.02% at 105.73.

The yield on the 10-year Treasury note fell more than 10 basis points to a near 2-week low for the second straight session, closing at 4.56%; The yield on the two-year Treasury note, which is more sensitive to monetary policy, hovered near 5% to close at 4.98%.

Spot gold, which benefited from both the Fed's dovish comments and the geopolitical crisis in the Middle East, rose to a near two-week high and settled up 0.73% at $1,874.05 an ounce. Spot silver settled up 0.91% at $22.03 an ounce.

WTI fell 3.11% to $83.24 a barrel, while Brent fell 2.51% to $85.19 a barrel, despite comments from Saudi Arabia and Russia that they might take steps to stabilize the market next year, as supply concerns subsided and API crude inventories rose sharply. Both oil prices fell for two consecutive days, giving up more than half of the gains made after the Israeli-Palestinian conflict broke out.

The three major U.S. stock indexes rose for four consecutive sessions, with the Dow Jones Industrial Average up 0.19%, the Nasdaq up 0.71% and the S&P 500 up 0.42%. The Nasdaq China Golden Dragon Index closed up 0.4%, Nio both closed up 1% and Bilibili rose another 2%. Nvidia, Google and Amazon all rose in the 2% line.

Major European stock indexes were divided, with Germany's DAX30 closing up 0.22%, Britain's FTSE 100 down 0.10% and Europe's Stoxx 50 down 0.09%.

Market Focus

1. The Israeli prime minister and the main opposition leader agreed to form an emergency cabinet after the Israeli-Palestinian conflict left about 2,200 people dead on both sides. Hamas launched a massive rocket attack on Tel Aviv airport; Iran's president and Saudi Arabia's crown prince spoke for the first time since the two countries restored diplomatic ties, discussing the need to end attacks on Palestinians; “The Iranians have been clearly told to be careful,” Mr. Biden said. Israel's defense minister says Hamas will be wiped out. Israel's five-year sovereign CDS rose to 100BP, more than double its pre-conflict level.

2. India is considering extending export restrictions on medium rice.

3. Microsoft received a notice from the Internal Revenue Service demanding $28.9 billion in back taxes.

4. Russian Deputy Prime Minister Alexei Novak said there were no plans to raise taxes on oil producers.

5, US API crude inventories rose by nearly 13 million barrels last week, the largest increase since January.

6. Russia requires some exporters to sell foreign exchange profits to stabilize the currency, at a rate determined by the government.

7. Mr. Putin said the Opec + agreement would most likely be extended and further measures could be taken next year to stabilize the market.

8. Scalise has been nominated by House Republicans to be the next speaker of the US House of Representatives, and if the party is united, he will easily be elected.

9. Us Treasury Secretary Janet Yellen said that there is no easing of sanctions on Iranian oil in any way at present, and nothing is ruled out for (further) sanctions.

10. A number of Fed officials spoke, Bowman said the inflation problem may make the Fed need to raise rates further and stay there for a while; “We will see how rising long-term rates affect monetary policy,” Mr. Waller said. “Financial tightening will do some of the work for the Fed.” Mr. Bostic reiterated that no more rate increases were needed; Mr. Collins said officials were taking a patient approach, but further rate increases could be needed depending on incoming data, taking into account unrest in the Middle East. “The overall view was that risks to inflation were on the upside and risks to monetary policy were more in both directions,” the minutes of the September meeting said. “All participants agreed to keep interest rates high for a while and agreed that prudence was warranted.”

Institutional Perspective

01

Citibank

【Citibank: The PS5 price hike in Japan will have a limited boost to SONY's share price】

Kota Ezawa, analyst at Citi, wrote in a note that the price increase for SONY's new PS5 in Japan is positive, but unlikely to boost its share price significantly as SONY's sales in Japan only account for 20% of global sales.

02

Investing

【“People still want a serious and tangible alternative to the dollar, and they don't mind paying for it,” the investing analysts said.】

03

Nick Timiraos

【Nick Timiraos：Fed officials were divided over the need to raise rates again this year when they decided last month to keep their benchmark policy rate unchanged, minutes of the central bank's September meeting showed.】

Minutes from the Fed's September meeting showed officials were divided over the need to raise rates again this year when they decided last month to leave their benchmark policy rate unchanged, writes Nick Timiraos. Most participants thought another rate increase would likely be appropriate at future meetings, while some thought further increases might not be necessary. The rally in long-dated U.S. Treasury yields that began in August accelerated after last month's meeting. If long-term Treasury yields keep rising, Fed officials may not have to raise rates again this year.