MHMarkets：March 26, 2024 Economic Highlights

Date: March 26, 2024

Economic Highlights (GMT + 8)

2:00pm

USDCB Consumer Confidence

Market Overview

Global Market Recap

On Monday, the U.S. dollar index gave back some of its gains, briefly approaching the 104 mark, and closed down 0.19% at 104.22. The benchmark 10-year U.S. Treasury yield returned above the 4.2% level, closing at 4.246%, while the 2-year U.S. Treasury yield, most sensitive to Federal Reserve policy interest rates, closed at 4.63%.

Due to the dollar's fallback, spot gold rebounded, breaking above the $2180 mark during the U.S. session but failed to hold, closing up 0.3% at $2171.90 an ounce; spot silver ended up 0.04%, at $24.67 an ounce.

Amid geopolitical tensions and signs that OPEC+ will stick to its current production cut plan at the representative review meeting next week, oil prices rose, with WTI crude up more than 1%, briefly surpassing $82 in the U.S. session, and closing up 1.44% at $81.92 a barrel; Brent crude closed up 0.57%, at $86.01 a barrel.

U.S. stocks saw declines with the Dow Jones falling 0.41%, the S&P 500 down 0.31%, and the Nasdaq down 0.27%. Cryptocurrency concept stocks led the market, with Coinbase (COIN.O) up 9%, MicroStrategy (MSTR.O) up 21%. Reddit (RDDT.N) surged nearly 30%, and Trump's Digital World Acquisition Corp (DWAC.O) closed up 35%. The Nasdaq Golden Dragon China Index slightly fell, with Baidu (BIDU.O) up more than 3%, while Alibaba (BABA.N) fell nearly 1%.

European stocks were mixed, with Germany's DAX 30 index up 0.3%; the UK's FTSE 100 index down 0.17%; and the Euro Stoxx 50 index up 0.26%.

Hong Kong stocks opened higher but moved lower throughout the day. The Hang Seng Index closed down 0.16%, at 16,473.64 points. The Hang Seng Tech Index closed down 0.54%, at 3437.2 points. By the close, the total turnover of the Hang Seng Index reached 112.709 billion HKD. In the market, the aluminum sector led the gains, pharmaceutical outsourcing concept stocks were strong, and the real estate sector warmed up; computer and peripheral equipment sectors fell, and automobile stocks were low. Individual stock wise, China Hongqiao (01378.HK) rose 13.4%, Wuxi Biologics (02269.HK) rose 7.5%, Meituan (03690.HK) rose 5.72%, WuXi AppTec (02359.HK) rose 4.86%, Longfor Group (00960.HK) rose 4.72%, Baidu (09888.HK) rose 2.55%, and CNOOC (00883.HK) rose 1.69%; Beijing Automotive (01958.HK) fell 15.1%, Lenovo Group (00992.HK) fell 8.63%, and HKEX (00388.HK) fell 2.77%.

A-share major indexes fluctuated narrowly and turned downward in the afternoon, closing down with the Shanghai Composite Index down 0.71%, the Shenzhen Component Index down 1.49%, and the ChiNext Index down 1.91%. In the market, the construction machinery sector surged, with Weimai Seal up more than 14% and construction machinery stocks hitting the limit. The oil and gas sector strengthened, with Huai Oil Stock, Beiken Energy, and Longyu Stock hitting the limit. The Kimi concept continued to decline, with Huace Film and TV, Haitian Ruisheng falling more than 12%. Sectors like real estate, building materials, non-ferrous metals, home furnishings, coal, Xiaomi cars, and others also saw gains, while sectors like short drama games, intellectual property, storage chips, and brokerages mostly fell. Over 4500 stocks in the Shanghai and Shenzhen markets fell, with a turnover exceeding 1 trillion RMB.

Bitcoin's price significantly recovered, breaking above the $70,000 mark, currently at $70,268.01; Ethereum is now at $3,608.23.

Market Highlights:

· Putin states that the terrorist attack was carried out by radical Islamists and questions why the perpetrators attempted to flee to Ukraine.

· The UN Security Council passes a resolution demanding an immediate ceasefire in Gaza.

· The Federal Reserve's “doves” continue to support the expectation of three rate cuts in 2024.

· OPEC+ representatives believe there is no need to change policy next week.

· Russia requires oil companies to cut production to 9 million barrels per day by the end of June.

· Trump's business empire turns from danger to safety and enters the top 500 of the rich list.

· The central bank governor, Pan Gongsheng: There is still ample policy space and a rich reserve of tools in the future.

· Financial regulatory departments in four regions announce the cancellation of business qualifications for their respective gold exchanges.

· The restriction policy in non-core areas of first-tier cities may be canceled.

Institutional Views:

1. ANZ

With CPI data on the horizon, ANZ adopts a prudent stance on the Australian Dollar, forecasting potential underperformance in comparison to its G10 counterparts, especially against the US Dollar and the New Zealand Dollar. ANZ's bearish outlook is informed by the historical reaction of the AUD to CPI figures and the possible impact of forthcoming retail sales data. Market participants are encouraged to monitor the AUD closely around these crucial economic announcements, with predictions suggesting the AUD/USD pair could oscillate between 0.655 and 0.67 in the week ahead.

2. Credit Agricole

Japan's finance officials are holding a firm line on the potential for currency intervention to bolster the JPY, highlighting the concerns over its recent depreciation. Kanda's sharp comments, alongside insights from Credit Agricole‘s FAST FX model, signal a vigilant eye on USD/JPY fluctuations and a preparedness to counteract speculative trading. With the USD/JPY nearing pivotal points, market watchers remain keenly observant for any indications of intervention, a move that could markedly influence the JPY’s direction shortly.

3. Danske Bank

Danske Bank distinguishes its long-term bearish outlook on the EUR/USD from the potential for short-term upward movements in the pair. This nuanced perspective is shaped by factors including the trajectories of central bank policies, global interest rate trends, and shifts in economic forecasts. Danske's assessment implies that market participants should consider adapting their strategies to navigate both the immediate chances and the extended directional trends of EUR/USD.

4. Goldman Sachs

Following the Swiss National Bank's unexpected interest rate reduction and its revised inflation outlook, Goldman Sachs predicts that the Swiss Franc will face continued pressure over the next few months. This view is supported by a generally positive risk environment and the reduced attractiveness of low-yielding, safe-haven currencies such as the CHF. As a result, Goldman Sachs has revised its EUR/CHF projections, suggesting a slow but steady rise in the Euro's value relative to the Swiss Franc.

5. MUFG

MUFG expects Japan's verbal intervention to act as a short-term barrier against further yen weakening, mirroring historical reactions to comparable currency stress. Although the impact of such verbal interventions on fundamentally shifting market directions might be restricted, they demonstrate Japan's active approach to observing and potentially countering speculative trends in the yen. This assessment highlights the persistent difficulties Japanese authorities encounter in dealing with the repercussions of global monetary policy changes on currency equilibrium.