☆ At 22:45, the United States announced the Chicago PMI in December.
☆ At 02:00 the next day, the United States announced the total number of oil wells in the week from December 30.
☆ At 04:30 the next day, the Commodity Futures Trading Commission of the United States announced its weekly position report.
Market overview
Reviewof global market trend
On Thursday (December 29), the US economic data failed to strengthen the Fed's tightening expectations, and the dollar index fell below the 104 mark again, closing 0.47% lower at 103.97. After the US initial jobless claims data was released, the yield of 10-year US Treasuries increased its decline, falling from 3.89% to 3.82% within the day; The yield of two-year US bonds rose slightly, rising to 4.39% as high as possible. As of the closing of US stocks, the trading volume was around 4.37%.
Thanks to the fall of the US dollar, spot gold continued to rebound, once standing at 1820 US dollars/ounce, rising 0.59% to 1814.99 US dollars/ounce; Spot silver failed to recover from the $24 mark, rising 1.54% to $23.91/oz.
The trend of crude oil fluctuated, and the US EIA crude oil inventory unexpectedly increased, which also increased the downward pressure on oil prices. However, WTI crude oil fluctuated higher after the European market fell below the US $77 threshold. As of the closing, the decline narrowed to 0.19%, to US $78.67 per barrel;Brent crude oil rebounded after breaking the US $82 barrier, closing down 0.14% slightly at US $83.66 per barrel. European natural gas rebounded from the recent downturn, and traders believed that the mixed weather forecast would determine the demand level next month. The European natural gas benchmark futures contract was up 6% at one time and hit a 10 month low earlier this week.
US stocks opened higher and closed higher, with the Dow up 1.05%, the Nasdaq up 2.59% and the S&P 500 up 1.74%. Information technology and non essential consumer goods sectors led the gains. Tesla closed up more than 8%. The Nasdaq China Golden Dragon Index rose 2.68%, while iQIYI rose 19%.
European stocks gained collectively, with Germany's DAX30 index up 1.03%, Britain's FTSE 100 index up 0.22%, France's CAC40 index up 0.97%, Europe's Stoxx 50 index up 1.08%, Spain's IBEX35 index up 0.72%, and Italy's FTSE MIB index up 1.16%.
Market Focus
1. According to AP: Brazilian soccer legend Pele died at the age of 82.
2. TC Energy: A controlled restart of the Cushing extension of the KEYSTONE pipeline has been carried out.
3. Goldman Sachs lowered the average price of Br oil to $90 next year.
4. Belarusian Foreign Ministry summoned the Ukrainian ambassador over the Ukrainian missiles falling into the territory of Belarus.
5. Serbian President Vucic lifted military alert on Kosovo.
6. South Korean stock market fell 24.9% in 2022, which was the biggest annual drop since 2008.
7. U.S. House of Representatives investigative panel withdraws subpoena for Trump on Jan. 6 due to inability to complete investigation within deadline.
8. Netanyahu took office as prime minister of Israel for the third time, and his primary goal is to contain Iran to ensure Israel's security.
9. ECDC: No reason to restrict Chinese travelers; variant strains prevalent in China have already been prevalent in the EU.
Geopolitical Situation
Conflict Situation：
1. Russian Foreign Minister: There will be no dialogue under the conditions of the “peace program” in Ukraine.
2. According to the Ukrainian state news agency: the whole territory of Ukraine has been hit by a massive missile attack. The subway in the eastern Ukrainian city of Kharkiv has been suspended.
3. Ukrainian presidential adviser Podoljak: Russia launched more than 120 missiles into Ukrainian airspace.
4. According to AFP: 40% of citizens in Kiev, Ukraine suffered power cuts after the air strikes. All 16 Russian missiles aimed at Kiev were shot down.
5. Ukrainian Armed Forces: Ukrainian forces eliminated nearly 800 Russian personnel and shot down 10 drones in 24 hours, with Russian forces suffering the greatest losses on the Liman and Bakhmut fronts; over the past week, Ukrainian forces advanced 2.5 kilometers toward the city of Krymina in Luhansk region.
6. According to TASS: Ukrainian S-300 missile shot down in Belarus; Belarusian Foreign Ministry summoned the Ukrainian ambassador over the Ukrainian missile landing on the territory of Belarus.
Energy Situation：
1. Russia's State Oil Pipeline Transport Company received an application from Kazakhstan's state oil carrier KazTransOil for additional transit reserves to Germany via the “Friendship” pipeline; the Russian deputy prime minister said he was ready to support Kazakhstan's oil application.
2. Poland may continue buying Russian oil in January, breaking its promise to stop all purchases by the end of the year. Poland, for its part, previously said it might need EU sanctions before it would stop importing Russian crude through the pipeline.
3. Russian Finance Minister: Russia will sell oil at market prices, and the implementation of any price cap would distort the market.
4. Ukrainian State Railways: Ukraine has activated standby internal combustion locomotives due to local power outages in some infrastructure.
5. 2022 Gazprom's exports to non-CIS countries will reach a 30-year low of 100 billion cubic meters.
Institutional Perspective
1. Goldman Sachs：Natural gas prices are expected to fall to $4.00-$4.20 per MMBtu in the second to third quarters of 2023, compared to current expectations of $4.20-$4.40 per MMBtu. For us, the near-term outlook for the oil market remains less optimistic, given concerns about (oil) oversupply. Brent crude oil price is expected to be $90 per barrel in 2023, compared to $110 per barrel previously, which is in line with expectations of a long-term medium-term Brent price of $90 per barrel. Maintains a constructive view on near-term oil prices. The best price point for oil stocks is when the price of Brent is $90 per barrel, and oil prices are expected to average between $80 and $100 per barrel from 2023 to 2026, with continued volatility.
2. SOCIETE GENERALE：As the Bank of Japan stimulates hedging, the yen's spike is just beginning.
Societe Generale said Tuesday's announcement by Bank of Japan Governor Haruhiko Kuroda to double the ceiling on 10-year government bond yields; the sudden policy adjustment shocked markets and also increased pressure on the country's international investors to hedge their foreign assets, which is expected to further push up the yen's exchange rate. Juckes, chief foreign exchange strategist at Societe Generale, said the dollar-yen exchange rate could fall to 125 in January next year as Japanese fund managers slowly adapt to the Bank of Japan's tougher stance, with the pair falling more than 3 percent on Tuesday, meaning the yen will rise another 6 percent from current levels in the future.
3. MUFG：The British pound has room for further weakness against the euro.
Mitsubishi UFJ Financial Group said the pound has room for further weakness against the euro, as the European Central Bank may tighten monetary policy more than the Bank of England next year. So far, the pound is still the third worst performing currency in the G10. On the other hand, so far this year, the euro has topped the performance of G10 currencies, with only the dollar and the Swiss franc performing better than the euro. Considering the Russian-Ukrainian conflict and the current recession that the Eurozone may be in, the euro's performance in the G10 currencies can be quite bright.
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