MHMarkets：October 25, 2023--Fundamental Reminder

22:00 CAD BoC Interest Rate Decision (OCT/25)

23:00 The Governor and Senior Deputy Governor of the BoC hold a press conference on monetary policy.

22:00 USD New Home Sales (SEP)

23:00 USD EIA Crude Oil Stocks Change (OCT/20)

Markets were expecting an increase of 1.55 million barrels

The next day at 1:00, Ms. Lagarde, the president of the ECB, speaks at a formal dinner at the Greek central bank.

The next day at 4:35, Fed Chairman Powell delivers welcoming remarks at the Moynihan Lecture in Social Science and Public Policy.

Market Overview

Review of Global Market Trend

The dollar index fell and then rose on Tuesday, hitting an intraday low of 105.36, before strongly recovering all its losses and regaining the 106 mark to end up 0.61% at 106.24. U.S. Treasury yields rose and then fell, with the 10-year yield barely holding at 4.8% before closing at 4.819%. The yield on the two-year Treasury note rose above 5.1% and reached an intraday high of 5.133% before closing at 5.108%.

Spot gold fell sharply in European trading, falling as low as $1,953.70 before recovering to trade above $1,970 and ending down 0.09% at $1,971.06 an ounce. Spot silver failed to hold above the $23 mark and was last down 0.28% at $22.91 an ounce.

The outlook for energy demand has been weighed down by a series of data from Germany, the euro zone and the U.K. pointing to an economic slowdown and the possibility of recession. Crude oil extended Monday's sharp losses, with WTI crude falling more than 3% to a session low of $82.91 before ending down 2.82% at $83.63 a barrel, while Brent crude also fell more than 3% to end down 3.63% at $87.17 a barrel.

The three major U.S. stock indexes closed up, with the Dow Jones Industrial Average up 0.62%, the Nasdaq up 0.93% and the S&P 500 up 0.73%. The Nasdaq China Golden Dragon Index jumped nearly 4%, Xpeng Motor rose more than 10%, Alibaba closed up nearly 3% and Bilibili rose more than 7%. Digital-currency stocks closed sharply higher, with Coinbase up more than 6% and MicroStrategy and Riot Blockchain both up more than 10%.

Major European stock indexes closed mostly higher, with Germany's DAX30 up 0.54%, the U.K. 's FTSE 100 up 0.2% and the Euro Stoxx 50 up 0.58%.

Market Focus

1. Israel's ambassador has called for the resignation of the UN secretary general amid a conflict that has killed more than 7,200 people on both sides and displaced 1.6 million people in Gaza.

2. As attacks continue on U.S. bases in the Middle East, IDF postpones ground offensive for 'strategic reasons'

3. S&p: Israel outlook downgraded to negative due to geopolitical risks; It also confirmed its “AA-” rating. The conflict in Israel is expected to remain focused on the Gaza Strip and last no more than three to six months.

4. Markit's preliminary services PMI for October came in at 50.9, the highest since September 2022. In contrast, the preliminary composite PMI for the eurozone fell to 46.5 in October from 47.2, the lowest since November 2020.

5. Just hours after becoming the Republican candidate for speaker of the US House of Representatives, Emmer has dropped out of the race. The House of Representatives is set to continue the shutdown, and the expiration of temporary government spending looms.

6. UAW: 5,000 more workers join strike action at GM plants; The total number of strikers reached 45,000.

7, the BOJ is said to be considering whether to adjust the YCC in response to market shocks, while seeing no need to change forward guidance.

8. ECB President Lagarde told EU officials that efforts to fight inflation are going well.

9. Rba Chairman Brock: If the CPI outlook rises significantly, the RBA will not hesitate to raise interest rates.

10. Ray Dalio, founder of Bridgewater: Pessimistic about the global economic outlook.

Institutional Perspective

01

Morgan Chase

【Morgan Chase：Jamie Dimon, jpmorgan's chief executive, has warned of the dangers of locking in the economic outlook, especially given the poor recent performance of central banks like the Federal Reserve】

Jamie Dimon, jpmorgan's chief executive, has warned of the dangers of locking in the economic outlook, especially given the poor recent performance of central banks like the Federal Reserve. In the latest of many warnings about what lies ahead, the head of the nation's largest bank by assets warned that multiple factors are emerging now that make things more difficult.

02

Bank of America

【Bank of America：Rising interest rates are making already overvalued big tech companies, which remain the most crowded area for money managers to trade, look increasingly expensive】

The recent woes of long-dated U.S. growth stocks, exacerbated by rising Treasury yields, may be about to ease. The Taylor Rule is an equation developed by Stanford University economist John Taylor in 1993 to measure how the Federal Reserve uses its overnight bank lending rate to control inflation or stimulate the economy. Now, the equation appears to have reached a critical turning point, indicating that the Fed has finally normalized interest rates, with important implications for the U.S. stock market.

03

RBC

【RBC：Monetary policy may already be tight enough】

“Monetary policy is probably tight enough,” Carrie Freestone, an economist at RBC, said by phone. “But I don't think the Bank of Canada will explicitly say they're done raising rates because they want to keep that option on the table if they need to continue raising rates later.”