MHMarkets：October 27, 2023--Fundamental Reminder

20:30USDCore PCE Price Index YoY (SEP) & USD Personal Spending MoM (SEP)

Markets are expecting the Core PCE Price Index to register 3.7%, easing from a prior 3.9%.

22:00 USD Michigan Consumer Sentiment Final (OCT) & USD 1 Year Inflation Expectation (OCT)

TBD  At the invitation of US Secretary of State Blinken, Member of the Political Bureau of the CPC Central Committee and Foreign Minister Wang Yi visits the US from October 26 to 28

MHMarkets Market Overview

Review of Global Market Trend

The dollar index flirted with the 107 mark on Thursday, but retreated in U.S. trading to end up 0.07% at 106.62. U.S. Treasury yields rose and then fell, with the 10-year yield falling below the 4.9% mark to close at 4.849%. The yield on the two-year Treasury note fell back near 5% to last close at 5.046%.

Spot gold rose and then fell, reaching an intraday high of $1,993.52 in European trading before easing to end up 0.26% at $1,984.74 an ounce. Spot silver failed to hold above $23 and was last down 0.3% at $22.79 an ounce.

Oil fell another 2%. WTI crude fell sharply before the U.S. market and hit a session low of $82.53, before recovering some losses to end down 2.12% at $83.45 a barrel, while Brent crude fell 2.03% to $87.21 a barrel.

The three major U.S. stock indexes continued to fall, dragged down by big technology stocks, with the Dow Jones Industrial Average closing down 0.76%, the Nasdaq down 1.76% and the S&P 500 down 1.18%. Bucking the trend, Nasdaq China's Golden Dragon Index closed up 0.4%, with shares of JD.com (JD.O) and Xpeng Motor (XPEV.N) both up more than 3% and Alibaba (BABA.N) up nearly 2%. Big tech stocks fell broadly, with Microsoft (MSFT.O), META Platforms (META.O) and Tesla (TSLA.O) all down more than 3%, and Apple (AAPL.O) and Alphabet A (GOOGL.O) down more than 2%.

Major European stock indexes closed mostly in the red, with Germany's DAX30 down 1.08%, Britain's FTSE 100 down 0.81% and the Euro Stoxx 50 down 0.59%.

Market Focus

1. The preliminary annualized quarterly rate of real GDP in the US in the third quarter came in at 4.9%, the highest since the fourth quarter of 2021. Yellen said higher yields are a sign of the strength of the economy. Traders generally expect the Fed to hold rates steady for the rest of the year.

2. The ECB kept its three major interest rates unchanged, in line with market expectations, and reinvestment will continue at least until the end of next year. Ms. Lagarde said the pause did not mean no rate increases later.

3. Ukraine's central bank cut its benchmark interest rate to 16% from 20%, against market expectations of a cut to 18%; GDP growth in 2023 is expected to be 4.9%.

4. SEC Chairman Gensler: The SEC has 8-10 filings in front of it on possible bitcoin exchange-traded products.

Institutional Perspective

01

Goldman Sachs

【Goldman Sachs :Interest rates will likely stay at current levels, but won't rise further】

“This data doesn't change the likelihood of a rate decision for the November FOMC meeting,” said Lindsay Rosner, head of multisector fixed income investments at Goldman Sachs Asset Management. Rosner thinks rates will likely stay where they are, but won't be raised further.

02

Morgan Stanley

【Morgan Stanley：The Fed is set to maintain a hawkish stance, which means maintaining its bias toward higher interest rates】

“While the Fed may not change rates next week, the economic data that came out today was stronger than expected, which also means the Fed will maintain its hawkish stance, which is to maintain its bias toward higher rates,” said Mike Loewengart, head of model portfolio construction at Morgan Stanley's global investment office.

03

HSBC

【HSBC：Weighed down by a combination of rising Treasury yields and a stronger dollar, gold is likely to be on the defensive in the near term unless political risks escalate】

Weighed down by a combination of rising Treasury yields and a stronger dollar, gold is likely to be on the defensive in the near term unless political risks escalate