MHMarkets：February 6, 2024 Economic Highlights

Date: February 6, 2024

Economic Highlights (GMT + 8)

11:30am

AUDCash Rate

AUDRBA Rate Statement

AUDRBA Monetary Policy Statement

12:30pm

AUDRBA Press Conference

5:30pm

GBPConstruction PMI

11:00pm

CADIvey PMI

Market Overview:

Global Market Recap

On Thursday, the US Dollar Index reversed its gains under the pressure of a rising British pound, falling back to near the 103 level, close to the level before the Federal Reserve's interest rate decision announced on Wednesday, ultimately closing down 0.446% at 103.06. As concerns about a resurgence of the banking crisis offset the cooling expectations for interest rate cuts, the yield on 10-year US Treasury notes fell below the 3.9% mark, ultimately closing at 3.882%, setting a new low since the beginning of the year. The yield on the more Fed-sensitive 2-year US Treasury notes closed at 4.211%.

Spot gold continued to rise after the release of initial jobless claims, erasing all intraday losses, reaching a high of 2065.29, and finally closing up 0.76% at $2054.9 per ounce, marking the fourth consecutive trading day of gains and reaching a new half-month high. Spot silver finally closed up 1.04% at $23.18 per ounce.

Affected by media reports that Hamas and Israel are hopeful to reach a ceasefire agreement, international crude oil prices turned from gains to losses during the session, setting a new closing low since January 23. WTI crude closed down 2.54% at $73.82 a barrel; Brent crude closed down 2.08% at $78.77 a barrel.

US stock indices collectively closed higher, with the Dow Jones Industrial Average up 0.97%, the S&P 500 up 1.25%, and the Nasdaq up 1.3%. The KBW Bank Index fell by 1.7%, with Western Alliance Bancorporation (WAL.N) falling more than 7%, and New York Community Bank (NYCB.N) falling 11%. The Nasdaq Golden Dragon China Index rose by 1.38%, with Li Auto (LI.O) up more than 5%, and Bilibili (BILI.O) up 3%.

European stock indices were uniformly in the red, with the Euro Stoxx 50 index closing down 0.21%, the German DAX 30 index down 0.26%, and the UK's FTSE 100 index down 0.11%.

Market Highlights:

· The number of initial jobless claims in the US unexpectedly rose last week.

· The voting ratio of the Bank of England's Monetary Policy Committee was more hawkish than expected.

· OPEC+ maintains its oil production policy unchanged.

· Hamas and Israel are hopeful to reach a ceasefire agreement.

· Assets of US money market funds have reached $6 trillion for the first time.

· Yi Gang: Efforts must be made to increase capital investment across society.

· Securities transaction stamp duty fell by more than 34% year-on-year in 2023.

Institutional Views:

1. Goldman Sachs

Goldman Sachs has updated its forecast for the US Dollar, expecting an extended phase of robustness due to recent changes in Federal Reserve messaging and the outstanding performance of the US job market. This review indicates that, even with expectations for policy relaxation, the Dollar's supremacy is expected to persist, underpinned by the superior growth path of the US. Investors are encouraged to adjust their outlook based on these insights, acknowledging the lasting impact of the US economy on worldwide currency trends.

2. Credit Agricole

Credit Agricole's pessimistic view on the EUR/USD pair for 2024 stems from expected policy maneuvers by the European Central Bank (ECB) in comparison to the Federal Reserve, the possibility of increasing yield disparities across the eurozone, and a rise in global risk aversion. These elements together bolster the forecast that the US Dollar could see an appreciation against the euro over the course of the year. Investors are recommended to keep a close watch on these trends, as they hold substantial potential to impact the EUR/USD exchange rate dynamics significantly.

3. Nomura:

Nomura's analysis indicates that the Bank of England (BoE) might choose to keep interest rates steady for an extended period, following the latest Labor Force Survey (LFS) data revealing a stronger UK labor market than initially anticipated. This shift in outlook corresponds with the central bank's emphasis on labor market conditions as a key consideration in its monetary policy decisions.