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MHMarkets

August 2, 2023 - Fundamental Reminder

☆ 20:15 USD ADP Employment Change (JUL)

The market is expected to increase by 189,000 people, which is down sharply from the previous 497,000 people.

☆ 22:30 USD EIA Crude Oil Stocks Change (JUL/28)

The previous API crude oil data plummeted by 15.4 million barrels, and if the EIA crude oil inventory decline is similar, oil prices may get a bigger boost.

MHMarkets

Market Overview

Review of Global Market Trend

-- Data source: jin10 & Bloomberg

NEWS

On Tuesday, weighed down by the U.S. indexes and U.S. bond yields soared, spot gold than intraday highs fell sharply more than 30 U.S. dollars, and once in the U.S. plate fell to $1941.33 intraday lows, and ultimately closed down 0.3% at $1944.37 per ounce. But after Fitch's sudden announcement of the downgrade of the U.S. credit rating, gold opened $6 higher on Wednesday, currently running near the 1950 mark; spot silver fell more than 2% during the day, and recovered some of the lost ground at the end of the day, and ultimately closed down 1.83% at $24.29 per ounce.

The U.S. dollar index rose sharply during the session and stood at the 102 mark, touching a new 3-week high, eventually closing up 0.33% at 102.24. U.S. bond yields rallied, with the two-year U.S. bond yield back above 4.9%, closing at 4.906%; 10-year U.S. bond yields re-ascended to the 4% mark, eventually closing at 4.037%.

By the impact of API crude oil inventories fell sharply, crude oil on Wednesday, the U.S. strong reversal of all intraday losses and turn up. WTI crude oil plate nearly guarded $80, but then recovered all the lost ground and stood above $82, and ultimately closed up 0.5% at $82.13 per barrel; Brent crude oil closed up 0.49% at $85.63 per barrel.

The three major U.S. stock indexes diverged, with the Dow closing up 0.2%, the S&P 500 down 0.27%, and the Nasdaq down 0.43%. The U.S. Superconductor, which had risen more than 140% before the session, closed up 65%. Nasdaq China Golden Dragon Index closed down nearly 2%, "NEXTEV, XPeng Motors and Li Auto" mixed, NEXTEV, XPeng Motors fell more than 4%, Li Auto rose 3.6%.

Major European stock indexes closed lower across the board, with Germany's DAX 30 closing down 1.26%, Britain's FTSE 100 closing down 0.43% and Europe's Stoxx 50 closing down 1.43%.

Market Focus

-- Source: jin10 & Bloomberg

NEWS

1. Fitch downgraded the long-term rating of the United States from "AAA" to "AA+". U.S. Treasury Secretary Yellen was the first to refute the move.

2. Vietnam plans to increase rice production to benefit from rising prices.

3. Foreign media: Europe and the United States steel trade talks are slow, it may be difficult to reach an agreement within the year.

4. Russian media: Russia may set fertilizer export tariff at 8% for 1.5 years.

5. South Korea's room-temperature superconductivity team: the paper is flawed, is a member of the unauthorized release, has asked to be taken down.

6. Oil prices are too high, the U.S. Department of Energy withdrew a proposal to buy 6 million barrels of oil for the Strategic Petroleum Reserve.

7. World Gold Council: Central bank gold purchases slowed in the second quarter, but remain firmly positive. In the first half of this year, institutions bought 387 tons of gold, a record for the first half of the year.

8. Fed-Goolsbee: end of rate hikes needs to see more evidence of inflation easing, any rate cuts will be in the distant future; Bostic: September action depends on data, inflation has made significant progress. There is a risk of excessive tightening, and rates will not be cut before the second half of next year.

9. API crude oil inventories plunged 15.4 million barrels, the biggest drop in at least 40 years; Eurozone unemployment rate recorded 6.4% in June, which was a record low; U.S. JOLTs job openings recorded 9,582,000 in June, which was a new low since April 2021; Russia's MOEX stock index rose to levels before the outbreak of the Russia-Ukraine conflict.

Geopolitical Situation

——Mohicans Markets ETA

NEWS

Conflict Situation：

1. Moscow Mayor: Drone strike damaged 17th floor of tower building Separately, a second drone was shot down on the outskirts of Moscow.

2. The General staff of Ukraine's armed forces reported the loss of 500 Russian troops over the past day, along with equipment including five tanks, 17 armored vehicles, 23 artillery systems and 10 tactical drones.

3. Russian Defense Ministry: Russia foiled a Ukrainian drone attack on a civilian transport ship in the Black Sea. Ukraine presidential adviser: Kyiv has not and will not attack civilian ships or other civilian targets in the Black Sea, Russian claims are fiction.

4. Russian Defense Ministry: Russia foiled an attempted Ukrainian drone attack on Moscow. Two of the drones were destroyed in Moscow Oblast, while another was suppressed by electronic systems and crashed in a non-residential complex in the city of Moscow.

MHMarkets

Institutional Perspective

01

Goldman Sachs

Goldman Sachs raised its oil deficit forecast and kept its price expectations unchanged

On August 1, Goldman Sachs raised its forecast for an oil supply deficit due to efforts by Russia and Saudi Arabia to cut supply. The bank now expects the oil market to post a supply gap of 2.3 million barrels a day in the current quarter, falling to 1.4 million barrels a day in the fourth quarter. Analysts expect a supply gap of 600,000 barrels a day on average in 2024. Still, the bank kept its price forecasts unchanged as strong inventory levels and the lingering impact of high interest rates weighed on oil prices. Goldman Sachs expects Brent oil to reach $86 a barrel by the end of the year.

02

SOCIETE GENERALE

SOCIETE GENERALE：The pound struggles on days when the BOE raises rates

On August 1, economists at Societe Generale said they were bearish on the GBP/USD and bullish on the euro against the pound due to August seasonality. The overhang surrounding Thursday's BOE rate decision should make for cautious trading in GBP, although price action in these currency pairs ahead of the announcement will likely depend on ISM manufacturing data from the US today and ADP employment data on Wednesday. The decision to raise interest rates this year has generally not been well received by the pound. Three of the four rate hikes sent GBP/USD lower on the day. EUR/GBP rallied four times. The seasonal bearish character of the pound in August is pronounced, with the pound falling against the dollar eight times and the euro rising against the pound seven times over the past decade.

03

MUFG

【MUFG：The BOJ acted stealthfully and waited to see what would happen】

July 28 - By raising the ceiling for its fixed-rate operations to 1%, the BOJ effectively widened the target range for the 10-year government bond yield, making it easier for the central bank to steer the yield target flexibly, said MUFG senior market economist Naomi Muguruma. In this sense, the central bank acted stealthily. The BOJ will likely wait to see how these measures prove effective for the time being. The BOJ will not determine the strength of wage growth and price trends until at least next spring's labor offensive gives clues on wages.