MHMarkets：November 09, 2023--Fundamental Reminder

09:30 CNY Inflation Rate YoY (OCT)

16:35 BOJ Governor Kazuo Ueda is interviewed.

21:30 USD Initial Jobless Claims (NOV/04)

22:30 Fed Bostic and Barkin speak.

The next day at 00:00 Fed Barkin speaks.

The next day at 01:30, ECB President Lagarde speaks.

The next day at 03:00 Fed Chair Powell speaks.

MHMarkets Market Overview

Review of Global Market Trend

The 10-year Treasury note auction showed strong overseas demand, with the yield falling below 4.5% to close at 4.497%; The yield on the two-year Treasury note, which is more sensitive to the Fed's policy rate, closed slightly higher at 4.936%.

Spot gold fell for a third straight session to a new three-week low, deepening losses in U.S. trading, falling below the $1,950 mark, before settling down 0.97% at $1,9499.93 an ounce, a near three-week low. Spot silver settled down 0.37% at $22.54 an ounce.

International oil prices continued to suffer from demand concerns, falling further below more than three-month lows. WTI crude closed down 1.99% at $75.55 per barrel; Brent crude lost $80 a barrel to settle down 2.1% at $79.69 a barrel.

The three major U.S. stock indexes fluctuated slightly throughout the day, with the Dow Jones Industrial Average closing down 0.12%, the Nasdaq up 0.08% and the S&P 500 up 0.1%. Oracle (ORCL.N) and Eli Lilly (LLY.N) both rose more than 3%, while Microsoft rose 0.7%, marking its longest winning streak since 2019. The Nasdaq China Golden Dragon Index closed down 0.46%, while Xpeng Motors (XPEV.N) fell 6%.

Major European stock indexes rose. Europe's Stoxx 50 index closed up 0.6%, Germany's DAX30 up 0.51%, Britain's FTSE 100 down 0.11%, France's CAC40 up 0.72%, Spain's IBEX35 up 0.52% and Italy's FTSE MIB up 0.13%.

Market Focus

1. The Cleveland Fed began a search for its next president, with current Chair Loretta Mester's term ending June 30. Fed Chair Powell, who urged Fed economists to be flexible in their forecasting methods, did not comment on monetary policy or the economic outlook in his remarks. New York Fed President John Williams: The Fed's economic models aren't to blame for inflation forecast miscues. Fed Governor Cook: Geopolitical tensions abroad could change U.S. economic outlook

2. The monthly rate of wholesale sales in the US recorded 2.2% in September, the largest increase since January 2022, beating expectations of 0.8% and revised from a previous 1.80%.

3. Bailey, Bank of England Governor: It's too early to talk about cutting interest rates. The next inflation reading is expected to be considerably lower.

4. According to Interfax: Russia is considering increasing exports of certain gasoline grades, sources said.

5. Israeli-palestinian conflict - Israeli military: Hamas has lost control of northern Gaza and Qatar is said to be mediating a 1-2 day ceasefire in exchange for the release of more than a dozen hostages. U.S. officials say a U.S. MQ-9 Retractor drone was shot down near the coast of Yemen.

6. Russia-ukraine conflict - Ukraine's military says Russian missiles have hit merchant ships or damaged grain export lanes. Ukraine will extend martial law and mobilization for 90 days: Ukrainian lawmaker Eu Commission: Ukraine can open accession talks once it meets the final conditions.

7. London Metal Exchange trading and settlement fees will rise by an average of 13 per cent from January 1.

Institutional Perspective

01

Goldman Sachs

【Goldman Sachs CIO Shah：The Fed may have completed raising interest rates and steepening the yield curve】

Ashish Shah, chief investment officer of public investments at Goldman Sachs Asset Management, said the Fed is likely done raising interest rates, and the main implication for bond investors is a steeper Treasury yield curve in the coming months. “The growth and inflation data suggest the Fed is likely done raising rates,” Mr. Shah said at Goldman Sachs Asset Management's 2024 Investment Outlook Web conference, adding that the bar for the Fed to start cutting policy rates is high. “The easiest trading strategy on the bond side, which is what we use in our portfolios, is yield curve steepening.” There are a lot of people who are sitting on the sidelines and will move into bonds once the Fed starts to tilt toward easing policy.

02

JPMorgan Chase

【JPMorgan Chase：Middle East Triggers Global Crisis？ Perhaps the worst since World War II!】

JPMorgan Chase & Co. Chief Executive Jamie Dimon warned that conflict situations unfolding in Europe and the Middle East threaten to trigger the worst global crisis since World War II. “In the United States, we continue to have a strong economy and we still have a lot of fiscal and monetary stimulus in the system. But these geopolitical problems are very serious, arguably the most serious since 1938.”

03

Westpac

【Westpac：The RBA is not expected to raise rates again in December】

The RBA hiked interest rates to a 12-year high on Tuesday but downplayed its tightening bias, making it rely more on data to decide policy. “We don't expect the RBA to raise rates again in December,” said Luci Ellis, chief economist at Westpac Banking. The change in language in the last paragraph of the statement suggests the bank hopes it won't have to raise rates again, but is more than willing to do so if circumstances change. There's not going to be enough new information between now and the December meeting to push them to change their view.