MHMarkets：November 23, 2023--Fundamental Reminder

16:30 EUR Germany Manufacturing PMI Flash (NOV)

17:00 EUR Manufacturing PMI Flash (NOV)

17:30 GBP Manufacturing PMI (NOV)

20:30 The ECB publishs the minutes of its October monetary policy meeting

Closed reminder: Due to the US Thanksgiving holiday (November 23), the US stock market will be closed today and close early tomorrow. Trading in CME precious metals and US crude futures contracts, as well as ICE cloth oil contracts, will close early, please note. In addition, the Tokyo Stock Exchange will also be closed for a day due to labor Thanksgiving.

MHMarkets Market Overview

Review of Global Market Trend

On Wednesday, the dollar index rebounded from a 2-1/2-month low, possibly on the view that the U.S. labor market was not cooling as quickly as expected. It briefly climbed back above the 104 mark in U.S. trading before paring some gains to end up 0.26% at 103.88. Us Treasury yields fell first and then rose. The yield on the 10-year Treasury note closed at 4.408%; The yield on the two-year Treasury note, which is more sensitive to the Fed's policy rate, reached an intraday high of 4.94% before closing at 4.897%.

Spot gold briefly broke through the $2,000 mark in European trading and rose to an intraday high of $2,006.38, but gave up most of its gains in U.S. trading and lost the 1,990 mark to end down 0.42% at $1,989.95 an ounce. Spot silver settled down 0.46% at $23.63 an ounce.

Oil prices fell as much as 4% in two days after Opec + postponed a ministerial meeting. WTI crude fell to a session low of $73.85 before recovering most of its losses to end down 1.31% at $76.76 a barrel; Brent crude briefly lost the $80 mark and fell to an intraday low of $78.53 before recovering some ground to end down 1.08% at $81.53 a barrel.

The three major U.S. stock indexes closed up in volatile trading, with the Dow up 0.53%, the S&P 500 up 0.41% and the Nasdaq up 0.46%. Microsoft (MSFT.O) closed up more than 1% to set another record close, while Nvidia (NVDA.O) fell 2.4%. The Nasdaq China Golden Dragon Index closed up 0.48%, with Baidu (BIDU.O) up nearly 6% and Ctrip (TCOM.O) up 6.5%.

Major European stock indexes were mixed. Europe's Stoxx 50 index closed up 0.46%, Germany's DAX30 index rose 0.36% and Britain's FTSE 100 index fell 0.17%.

Market Focus

1. U.S. initial jobless claims for the week ended Nov. 18 came in at 209,000, below the 226,000 expected and the lowest since the week ended Oct. 14. The number of  continuing jobless claims fell for the first time in two months. The monthly rate of US durable goods orders in October was -5.4%, the lowest since April 2020.

2, A ministerial meeting scheduled for this weekend was postponed by four days to Nov. 30 as Saudi Arabia and its oil Allies were once again bogged down by a dispute over output quotas for African members.

3. Russia lifts temporary ban on summer diesel fuel exports; Russian Deputy Prime Minister Alexander Novak: Oil prices are at a good level, the market is balanced.

4. Israel's cabinet has voted to agree to a temporary ceasefire with Hamas, after which it says it will continue fighting. Hamas will release about 50 hostages in exchange for a temporary four-day cease-fire. Israel's prime minister said Hamas would release 10 Israeli hostages on Tuesday. The prime MINISTER's office said THE hostages were not expected to be released before Friday.

5. Iraq's Deputy Prime Minister and Foreign Minister met with the US ambassador to Iraq and condemned the US violation of Iraq's sovereignty.

6. UK Chancellor of the Exchequer Hunt delivers the government's autumn budget, announcing a total of 55 billion pounds of tax increases and spending cuts.

7. ECB Vice President Guindos: It is too early to talk about rate cuts. Policy depends on data, and policy communication is very clear.

8. Altman will return to OpenAI as CEO, and former U.S. Treasury Secretary Summers will be one of the new board members.

Institutional Perspective

01

Morgan Chase

【Morgan Chase：The BOE is expected to make its first rate cut in the fourth quarter of 2024】

Morgan said it now expected the BOE to cut rates by 50 basis points in the fourth quarter of 2024, having previously expected it to keep rates at current levels throughout 2024. Alan Monks, an economist at Morgan Chase, said the current pace of the Labour market slowdown suggested the boe might ease monetary policy a bit earlier than expected. But the bulk of monetary policy normalisation is expected to come in 2025.

02

Deutsche Bank

【Deutsche Bank：Despite the prospect of aggressive rate cuts, the factors supporting the dollar will not change in the short term】

High real interest rates and the resilience of the US economy have supported the dollar this year and are unlikely to change in the short term despite “aggressive” bets that the Fed will cut rates next year, Deutsche Bank said. “For the dollar to pivot, the Fed needs to turn dovish and cut rates more than the other G10 central banks,” said George Saravelos, head of global foreign-exchange research at Deutsche Bank. “However, the risk versus market pricing is that the Fed's easing cycle is delayed and the dollar remains a high-yielding currency.” The transmission mechanism of policy rate increases in the US is different from other G10 countries, resulting in superior economic performance. Expectations that the Fed will be the most dovish in developed markets next year look aggressive. The bank believes the market is currently pricing in a low dollar safe-haven risk premium, especially given geopolitical risks in 2024.

03

Westpac

【Westpac：Australia's low economic growth will persist】

Leading indicators of economic activity in Australia now point to low growth in 2023 extending into 2024. Westpac's leading indicator growth rate has fallen to -0.40%. Data showing a further cooling in Australia's labor market rattled financial markets and shook investor confidence. Matthew Hassan, a senior economist at Westpac, said the leading indicator points to little change in the underperformance picture going forward.