MHMarkets：February 19, 2024 Economic Highlights

Date: February 19, 2024

Economic Highlights (GMT + 8)

All Day

CADBank Holiday

USDBank Holiday

Market Overview

Global Market Recap

Last Friday, another set of hot inflation data weakened the prospects of a rate cut by the Federal Reserve, sending the US dollar index to refresh its daily high during the session. However, it quickly gave up all its gains and eventually closed nearly flat at 104.275. The yield on the benchmark 10-year US Treasury briefly rose above the 4.3% mark before falling back, closing at 4.281%; the rate-sensitive 2-year US Treasury yield rose more than 10 basis points at one point, reaching a year-to-date high, but its gains were slightly reduced by the close, ending at 4.644%.

Spot gold briefly plunged nearly $10 after the US January PPI data was released, then turned higher and finally closed up 0.44% at $2013.23 an ounce, but still recorded a second consecutive week of declines; spot silver, after stabilizing above the $23 mark, moved strongly higher, closing up 2.14% at $23.42 an ounce.

International crude oil prices rose for two consecutive weeks, reaching a near three-week high, as heightened tensions in the Middle East overshadowed the increasingly dim hopes for rate cuts and the gloomy demand outlook for this year. WTI crude closed up 0.81% at $78.16 a barrel; Brent crude closed up 0.58% at $83.22 a barrel.

US stock indices ended slightly lower, with the Dow Jones down 0.37%, the Nasdaq down 0.82%, and the S&P 500 down 0.49% at the close. Most major tech stocks fell, with Meta down over 2%, Google and Netflix down over 1%, and Apple, Microsoft, Amazon, and Nvidia slightly lower. The semiconductor sector was down, with Micron Technology and Qualcomm down over 2%, and Broadcom, AMD, and Intel down over 1%. Advanced Micro Devices closed nearly 20% lower, breaking below the $1000 and $900 levels, ending a nine-day winning streak. Chinese concept stocks were mixed, with the Nasdaq Golden Dragon China Index up 0.56%. XPeng and Li Auto rose over 3%, JD.com and Bilibili rose more than 2%, TAL Education fell over 3%, and New Oriental Education & Technology and Gaotu Techedu fell more than 1%.

Most major European stock indices closed higher, with Germany's DAX30 up 0.42%, the UK's FTSE 100 up 1.53%, and the Euro Stoxx 50 up 0.46%.

Hong Kong stocks opened higher and continued to rise, with the Hang Seng Index up 2.48% at 16,339.96 points. The Hang Seng Tech Index rose 3.71% to 3,342.73 points. Tech stocks were strong throughout the day, with GDS Holdings (09698.HK) up over 14%, Li Auto (02015.HK) and XPeng (09868.HK) up about 6%, and JD.com (09618.HK) up over 5%; the healthcare sector rebounded strongly, and industries such as real estate, consumer goods, non-ferrous metals, and semiconductors all rose.

Market Highlights:

· US January PPI exceeds expectations across the board

· Japan's central bank is still expected to end negative interest rates in the coming months

· Russia claims full control of the key eastern Ukrainian town of Avdiivka

· Russian opposition figure Navalny dies in prison

· Wang Yi meets with Blinken: The US should cancel its illegal and unreasonable sanctions against China

· Free Trade Zone offshore trade stamp tax incentives to be piloted in Shanghai

· Hang Seng Index company announces quarterly review results

· 2024 Spring Festival movie box office breaks 8 billion

Institutional Views:

1. Bank of America (BofA)

BofA has revised its forecasts for the CHF, adopting a strategy that expects a faster depreciation of the currency, driven by disappointing inflation figures and the potential for the SNB to implement monetary policy easing sooner than anticipated. Although these revisions are noted as slight, BofA indicates that the risks associated with their prediction for the CHF to weaken are skewed to the downside. This underscores a pessimistic view on the Swiss currency over the short to medium term.

2. ING

ING posits that although the EUR/USD exchange rate currently faces downward pressure due to a strengthening USD, it is nearing a key support level fundamentally. This perspective is grounded in the expectation of a slowdown in the US economy in 2024, a forecast that continues to hold sway among investors even as recent economic indicators seem to question the timing of this slowdown. ING argues that this context provides a basis for the resilience of the EUR/USD, suggesting that the exchange rate is approaching a bottom despite the short-term momentum of the dollar.