February 1, 2023-Fundamental Reminder
☆Pending OPEC+Joint Ministerial Monitoring Committeehold meeting
☆ 09:45 China January Caixin Manufacturing PMI
☆ 15:00 Monthly rate of Nationwide house price index in January
☆ 16:50 Final value of manufacturing PMI in France in January
☆ 16:55 Final value of manufacturing PMI in Germany in January
☆ 17:00 Final value of manufacturing PMI in the euro zone in January
☆ 17:30 UK manufacturing PMI in January
☆ 18:00 The initial value of January CPI annual rate, January CPI monthly rate and December unemployment rate in the euro area
☆ 21:15 ADP employment in the United States in January
☆ 22:45 PMI final value of Markit manufacturing industry in the United States in January
☆ 23:00 US ISM manufacturing PMI in January and monthly rate of construction expenditure in December
☆ 23:30 EIA crude oil inventory and EIA strategic oil reserve inventory for the week from the United States to January 27
☆ At 03:00 the next day, the Federal Reserve FOMC announced the interest rate resolution
☆ At 03:30 the next day, Federal Reserve Chairman Powell held a press conference
Market Overview
Review of Global Market Trend
The increase in labor costs in the fourth quarter of the United States announced last night eased, showing another sign of slowing inflation in the United States, which is undoubtedly what the Federal Reserve would like to see. Affected by the data, the US dollar index continued to decline, once pushed down to the 102 mark, closing down 0.14% at 102.1. The US dollar index fell 1.33% in January, the fourth consecutive month of decline.
The expectation of the Federal Reserve's slowing interest rate increase policy pushed the yield of US Treasuries down. The yield of 10-year US Treasuries fell by more than 6 basis points, from 3.54% to 3.51% in the day. The yield of 2-year US Treasuries fell more than 8 basis points at one time, and as of the closing of US equities, the trading volume was around 4.2%. The yield of 10-year US Treasuries fell more than 35 basis points in January, the largest decline since November last year; The two-year yield fell by 22 basis points in January.
Spot gold nearly lostthe US $1900 mark of the day, but then rebounded. After the release of the US labor cost data in the fourth quarter, it rose sharply, and once returned to the US $1930 mark, closing up 0.26% at US $1928.23/ounce. In January, it rose nearly 5.6%, closing up for the third consecutive month; Spot silver rebounded after falling below the 23 dollar mark in the intraday, closing up 0.54% at 23.73 dollars/ounce.
Crude oil fell for a time, because the market was worried that Europe and the United States would raise interest rates this week and release the signal of continued tightening policy, and the oil price once fell by more than 1% to a new low in nearly three weeks. However, analysts said that Opec + on Wednesday exceeded expectations of a small production cut. In addition, the CEO of American oil giant ExxonMobil said that the global crude oil market might continue to be tight, which greatly boosted the oil price. WTI crude oil fell to US $76.53, up 1.57% to US $79/barrel; Brent crude oil fell to US $83.14, up 0.51% to US $85.46/barrel.
The European benchmark TTF Dutch natural gas futures rose by more than 4% in the end of the day, but fell by 24% in January and hovered at a one-year and a half low. US natural gas fell more than 2% in the intraday and ended up 0.3% higher. It fell 40% in January and fell sharply for two consecutive months, and fell 35% in December.
European stocks were mixed, with Germany's DAX30 index up 0.01%; The FTSE 100 index in the UK ended down 0.16%; France CAC40 index closed up 0.01%; The European Stoxx 50 Index ended up 0.11%; Spain's IBEX35 index ended 0.15% lower; Italy's FTSE MIB index ended up 0.98%.
Market Focus
1. About 500,000 people will start striking in the UK from today.
2. IMF: Estimated economic growth of 5.2% in China, 1.4% in US and 0.7% in Eurozone in 2023.
3. NHK: Japan is considering relaxing restrictions on epidemic control for travelers from China.
4. Norway's Global Government Pension Fund, the world's largest sovereign wealth fund, recorded a loss of $164.4 billion in 2022.
5. U.S. natural gas futures fell 40% in January, which was the largest one-month drop in 22 years.
6. British media: Britain and the EU reached a customs deal, paving the way for an end to the post-Brexit row between the two sides over Northern Ireland.
7. U.S. natural gas exporter Freeport seeks government permission for the company to ramp up its efforts to resume gas export terminal or transmission pipeline operations.
8. The Q4 labor cost Index of the United States recorded a 1% quarterly rate, which was the third consecutive quarter of decline, and the wage-price spiral pressure eased; Eurozone GDP grew at a quarterly rate of just 0.1% in Q4.
Geopolitical Situation
Conflict Situation：
1. British military intelligence agency: Russia may aim to develop a new axis of advance into the Ukrainian-controlled Donetsk region.
2. Kherson authorities say Ukrainian troops attempted to leap the Dnieper River near Kherson but were repulsed.
3. Russian Prosecutor General: More than 9,000 Russian citizens who were mobilized for special military operations in violation of the provisions of the partial mobilization order have been demobilized.
Assistance Situation：
1. The sources said that the United States is ready to provide Ukraine with $2.2 billion in military assistance, including long-range weapons.
2. Dutch Prime Minister Rutte: The Netherlands has not yet received a request from Ukraine for F-16s, but is ready to consider the issue.
3. Norway's defense minister: will deliver German-made Leopard 2 main battle tanks to Ukraine “as soon as possible”, probably by the end of March.
4. Polish Deputy Defense Minister: Poland is not currently negotiating the transfer of F-16 fighter jets to Ukraine.
5. British Prime Minister's spokesman: It is unrealistic to provide aircraft to Ukraine at this time, and Britain will continue to discuss assistance to Ukraine with its allies.
6. Britain has trained 10,000 Ukrainian soldiers and plans to train 40,000 by 2023.
7. Ukrainian Foreign Minister: within the framework of the first aid, Kiev side will receive 120 to 140 Western tanks.
8. French Defense Minister: We will provide Ukraine with 12 Caesar guns; (when asked about the supply of fighter jets to Ukraine) there are no restrictions in this regard. France will send 150 French Army personnel to Poland every month to train 600 Ukrainian soldiers.
9. According to Politico, the U.S. government has not studied the issue of whether to supply F-16 fighter jets to Ukraine, and Biden's words do not mean that the U.S. side will not change its position.
10. The prime minister said Greece will not supply Leopard 2 tanks to Ukraine.
Institutional Perspective
01
Goldman Sachs：The U.S. natural gas market will enter a bear market cycle.
Goldman Sachs expects the U.S. natural gas market to enter a bear market cycle in 2023-2024. The market has seen a bearish trend as natural gas production continues to grow while growth in U.S. LNG export capacity is paused. Goldman Sachs acknowledges that current U.S. Henry Hub natural gas price levels have definitely not formed a hard bottom, and that warmer weather and lower heating demand could drive U.S. natural gas prices further down. Current natural gas prices will stimulate enough coal gas to replace natural gas and will dampen expected production growth by the end of the year. Goldman Sachs lowered its 2023 summer U.S. natural gas price estimate to $3.70 per million Btu from a previous $4.15 per million Btu and lowered its 2023-2024 winter gas price estimate to $3.60 per million Btu from $4.05 per million Btu.
02
SOCIETE GENERALE：The Eurozone will not fall into recession this winter.
Societe Generale said that the latest economic data increasingly confirms our view that the Eurozone will not fall into recession this winter. We now no longer expect a technical recession in Germany, one of the countries most severely affected by the energy supply shock last year, as German GDP did not fall in the fourth quarter. This means that the Eurozonewill grow at close to 1% this year, only slightly below potential growth. Unlike the ECB, we believe that Eurozonegrowth will also continue to be below potential next year as the impact of interest rate hikes and higher energy prices gradually emerge. We expect fourth-quarter Eurozone GDP next Tuesday to show 0.2% quarter-on-quarter growth.
03
MUFG：The pound could fall if the Bank of England issues a cautious outlook.
The pound is at risk of falling as the Bank of England may issue a cautious policy outlook at its next meeting, Mitsubishi UFJ said. Mitsubishi UFJ analyst Lee Hardman said in a report that the Bank of England is expected to raise rates by 50 basis points at its Feb. 2 meeting, but the market is now fully pricing in the bank cutting rates by at least 25 basis points by the end of the year. Given the increasingly dovish outlook for U.K. interest rates later this year, market participants expect guidance for next week's rate hike to suggest that the central bank will be more cautious about the need for further rate hikes. Hardman said this may pose downside risks to the pound.
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