February 27, 2023 -Fundamental Reminder
☆ At 12 o'clock, the Japanese Senate held a hearing to confirm the nomination of the governor of the Bank of Japan. After the approval of the Congress, Kazuo Ueda will take office as governoron April 9.
☆ At 21:30, the United States announced orders for durable goods in January, and the market generally expected that it would record – 4%, compared with 5.6%; The contract sales index of completed houses in January will be released at 23:00, and the market is generally expected to record 1%, up from 2.5%. If the data exceed expectations again, it may aggravate the market's expectation of further increase of the Federal Reserve's terminal interest rate.
☆ At 23:30, Federal Reserve Governor Jefferson delivered a speech on inflation and the dual mission of the Federal Reserve. Jefferson previously pointed out that the imbalance between supply and demand in the employment market indicates that high inflation may only slow down.
☆ British Prime Minister Sunak and European Commission President Von Der Leyen will announce a new Brexit agreement on Monday, provided that the two sides can reach agreement on the final details in the British lunch time talks.
☆ The second plenary meeting of the 20th Central Committee of the CPC was held from 26th to 28th.
☆ The Taiwan, China Stock Exchange is closed from 27-28.
Market Overview
Review of Global Market Trend
Last Friday, spot gold fluctuated and fell. Affected by PCE data exceeding expectations, the US dollar fell below the 1810 mark, hitting a new low in the year, and finally closed down 0.65% at $1810.81per ounce; Spot silver recorded a decline for the sixth consecutive week, falling behind the 21 mark, reaching the lowest level in three months, and finally closing down 2.46% at $20.77per ounce.
The US dollar index continued its rise and stood at 105 for the first time since January 6. US bond yields soared across the board. The yield of the two-year treasury bond bond, which is most sensitive to the policy interest rate of the Federal Reserve, rose above 4.8%, the highest since 2007. The yield of US 10-year treasury bond bonds rose 1.46% to 3.947%.
In terms of crude oil, there was a deep V reversal in the US market of the two oil, and the harvest date was two consecutive positive days. WTI crude oil reached the lowest level of 74, then rebounded sharply, erasing all intraday losses, and finally closed up 1.11% at 76.31 USDper barrel; Brent crude oil closed 0.86% higher at $83.16per barrel.
US stocks fell sharply, recording their worst weekly performance since 2023. The Dow fell 1.02%, the Nasdaq fell 1.69%, and the S&P 500 index fell 1.05%. Popular Chinese stocks fell generally, with Alibaba closing down 5.5%, NetEase closing down 5.1% and Bilibili closing down 7.1%.
The main indexes of European stocks fell across the board. Germany's DAX30 index closed 1.72% lower at 15209.74; The FTSE 100 index of the UK closed down 0.37% at 7878.66; The European Stoxx 50 Index closed 1.86% lower at 4178.82.
Market Focus
1. Australian Energy Minister: Ban on new coal mines is not part of climate policy reform.
2. ECB President Lagarde reinforced the expectation of a 50BP rate hike in March and noted that further rate hikes will be made if necessary.
3. Winter storm hit the the United States, and more than 210,000 customers lost power.
Geopolitical Situation
Conflict Situation：
1. Air defense sirens were sounded in many places, including the Ukrainian capital Kiev.
2. Russian Defense Minister Shoigu on how far Russia should push the threat away from the border: it depends on the weapons the West will send to Ukraine.
3. Russian Defense Ministry: Russian forces struck Ukrainian army personnel and targets such as artillery and ammunition depots in several directions, including Donetsk, and shot down one Ukrainian Mi-8 helicopter and several drones.
4. General Staff of the Armed Forces of Ukraine: In the last 24 hours, the U.S. Army repelled 71 Russian attacks in 7 directions and carried out 12 strikes against the areas of concentration of Russian personnel and military equipment.
5. Zelensky dismissed the commander of the Joint Forces Operation (JFO), Eduard Moskalev, without giving a reason. The unit is reportedly fighting in the Donbas region.
AssistanceSituation:
1. The Foreign Minister of Ukraine held talks with the Foreign Minister of Slovenia, where they discussed the details of the security assistance program for Ukraine.
2. German government spokesman: for months, there are no new concrete developments on the issue of NATO guarantees to Ukraine.
3. The White House talked about the possibility of supplying F-16s to Ukraine in the future, saying President Biden currently ruled out the possibility.
Institutional Perspective
01
Goldman Sachs
Goldman Sachs Announces $30 Billion Stock Buyback Program as Buybacks Pick Up Pace
Goldman Sachs Group Inc. approved a new stock repurchase program authorizing up to $30 billion in buybacks, but gave no timetable. The document shows that the pace of buybacks has accelerated. Goldman Sachs announced that it has repurchased about $2.25 billion of stock this quarter. That compares with a total buyback of $3.5 billion for all of last year.
02
SOCIETE GENERALE
【Societe Generale: ECB may raise interest rates further to boost the euro.】
Societe Generale said that the European Central Bank may raise interest rates further sharply to curb inflation, thus boosting the euro. Societe Generale foreign exchange strategist Olivier Korber said in a report that the reduced risk of recession in Europe and tight labor markets should maintain the upside risk of core inflation. The bank's economists still expect the ECB to tighten policy further sharply and only suspend rate hikes when the economy is on a more sustainable path of falling inflation. korber said peak interest rate expectations could be repriced higher as markets take a cautious approach.
03
MUFG
The yen may fall further after Bank of Japan governor nominee Kazuo Ueda said it was appropriate to maintain ultra-easy monetary policy, Mitsubishi UFJ said. Mitsubishi UFJ foreign exchange analyst Lee Hardman said in a report that Kazuo Ueda's comments at the confirmation of his nomination by the Japanese House of Representatives did not send a clear hawkish signal to drive a renewed speculative demand for the yen in the near term. That leaves the yen vulnerable to further pullbacks while yields outside Japan rise again on expectations that the Federal Reserve and other major central banks may have to raise rates further to lower inflation.
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