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August 15, 2023 - Fundamental Reminder

☆09:30 AUD RBA Monetary Policy Meeting Minutes (AUG)

☆14:00 GBP ILO Unemployment Rate (3M) (JUN) & GBP Unemployment Rate (JUL) & GBP Claimant Count Change (JUL)

☆20:30 USD Retail Sales MoM (JUL)

It is expected to come in at 0.4%, compared to the previous 0.2%.

☆23:00 USD Fed Kashkari Speech

Kashkari's latest public statement was last month, when he emphasized that entrenched inflation could prompt the Fed to raise rates further.

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Market Overview

Review of Global Market Trend

-- Data source: jin10 & Bloomberg

NEWS

On Monday, dragged by the higher dollar, spot gold fell below the 1910 mark, set a new low since July 6, and finally closed down 0.32% at $1907.51 per ounce; spot silver hit a low of 22.37 during the session, and then rebounded, and finally closed down 0.44% at $22.59 per ounce.

As the previous PPI slightly higher than expected may provide more ammunition for the Fed hawks to advocate another interest rate hike, the U.S. dollar index stood on the 103 mark, hitting a new high of more than a month, and finally closed up 0.282% at 103.17. U.S. bond yields climbed for the fourth consecutive trading day, known as "the anchor of global asset pricing," 10-year Treasury yields rose to 4.209% intraday, which was the highest level since November 8 last year; two-year Treasury yields closed at 4.973%. The yield on the 10-year Treasury note, known as the "anchor of global asset pricing", rose to 4.209% during the session, which was the highest level since November 8 last year, and finally closed at 4.201%; the yield on the two-year Treasury note closed at 4.973%.

International crude oil closed lower as concerns about a faltering demand recovery and a stronger U.S. dollar offset support for oil prices from tight supply and the fact that crude has been in overbought territory for some time.WTI crude oscillated and weakened, ending down 0.51% at $82.5per barrel, while Brent crude closed down 0.3% at $86.33 per barrel.

The three major U.S. stock indexes closed collectively higher, with the Dow closing up 0.07%, the Nasdaq continuing to strengthen after a low opening, closing up 1%, and the S&P 500 closing up 0.58%. Nvidia, which briefly fell below the trillion-dollar market capitalization, closed strongly up over 7%, Tesla closed down 1.1%, and Meta Platforms rose 1.5%. The Nasdaq China Golden Dragon closed down 0.48%, with Azera falling nearly 3% and Alibaba down over 2%.

The major European stock indexes were all mixed, with Germany's DAX30 closing up 0.46%, Britain's FTSE100 closing down 0.23%, and Europe's Stoxx50 closing up 0.21%.

Market Focus

-- Source: jin10 & Bloomberg

NEWS

1. LME tin futures premium hit the highest level since 1994.

2. New York Fed July survey: expected inflation one year from now is 3.5%, after being at 3.8%.

3. Musk will live broadcast with FSD drive to Zuckerberg's door call, META response: not at home.

4. foreign media: Saudi Arabia, the United Arab Emirates to join the AI grab "core" movement, want to use computing power in exchange for AI-related knowledge and technology.

5. Argentina's right-wing presidential candidate Avier Milei's primary election victory, the central bank emergency interest rate hike of 2,100 basis points.

6. Warren Buffett sold 70% of his Activision Blizzard position in Q2 in a big way, kept his Apple position unchanged, and built up several positions in homebuilding stocks.

7. Russia's central bank announces emergency rate meeting on Tuesday as ruble falls below 100 against the dollar; Putin's economic advisor says he wants to see a strong ruble.

Geopolitical Situation

——Mohicans Markets ETA

NEWS

Conflict Situation：    

1. Ukraine said it destroyed drones and missiles launched by Russia in Odessa between the night of August 13 and the early morning of August 14 local time.

2. Russia says it shot down drones from Ukraine in the regions of Belgorod and Kursk.

3. Russian Defense Ministry: Over the past day, Russian forces have used sea-based, long-range precision-guided weapons to strike Ukrainian drone production and storage facilities. Russian forces repelling the Ukrainian assault on multiple fronts also hit their S-300 air-defense system in Nikolayev Oblast.

4. General Staff of the Armed Forces of Ukraine: More than a dozen battles have taken place on the front lines in the last 24 hours. The Ukrainian air force struck Russian command centers, human and equipment concentration areas, antiaircraft missile systems, and destroyed a Russian Ka-52 helicopter.

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Institutional Perspective

01

Goldman Sachs

Goldman Sachs：U.S. retail gasoline prices are expected to average $3.6 a gallon through 2024.

02

SOCIETE GENERALE

SOCIETE GENERALE：The US core CPI is expected to have increased 0.3% month-over-month. A level of 0.4% or higher would signal chaos

August 10 - We expect the US core CPI to rise 0.3% month-over-month in July, up from 0.2% in June, Societe General Bank economists said. That's not a disaster, but it's not ideal, and it's not what a data-dependent Fed wants. That could help yields recoup ground lost earlier in the week amid heightened risk aversion. Month-on-month growth of 0.4% or more could signal chaos, including a hawkish repricing of the Fed, a sell-off in US Treasuries (and Bunds), swap payments, risk aversion in equities/credit/high beta FX, and dollar strength. A monthly rate of 0.2% or less would be a Goldilocks scenario: risk appetite in equity and currency markets, and a bullish flattening in 2-year / 10-year Treasuries.

03

MUFG

MUFG：The pound could still strengthen further

August 14 - After last week's U.S. inflation data, this week will see U.K. inflation data, wages and employment data and retail sales data, MUFG economists said. This week's UK data may not provide enough evidence that upside risks to inflation have eased somewhat to prevent the BOE from going ahead with a rate hike in September, in which case it is likely to see scope for further GBP strength following stronger GDP figures. However, with the US Dollar looking like it's also struggling to find solid levels, shorting EURGBP may be a better way to get the pound up.