In the early trading of the Asian market on Thursday (October 13), the dollar index traded around 113.25; the dollar climbed to a 24-year high against the yen on Wednesday, maintaining above the level that prompted Japanese officials to intervene last month, while the pound rebounded after a sharp decline in the previous trading day as investors were thinking about the Bank of England's next move; the dollar narrowed the gain after the minutes of the last meeting of the Federal Reserve showed some dovish colors; gold prices remained firm, and the US dollar and U.S. Treasury yields fell after the minutes of the Fed's last policy meeting were released, supporting the gold price; oil prices fell for the third consecutive day due to continued concerns about demand, the strengthening of the dollar and expectations of the major central bank's further rate hikes.
Commodity closing situation : Brent crude oil futures settlement price fell 2% to US$92.45 per barrel. U.S. crude oil futures settlement price fell 2.3% to $87.27 a barrel. US gold futures closed at $1,677.50, down 0.5%.
U.S. stock closing : The Dow Jones Industrial Average fell 0.1% to 29210.85 points; S&P 500 index fell 0.33% to 3577.03 points; Nasdaq index fell 0.09% to 10417.10.
Forecast on Thursday
15:30 European Central Bank Vice Governor Kimdos delivered a speech, 16:00 IEA released its monthly crude oil market report, and 19:00 Bank of England Monetary Policy Committee Member Mann delivered a speech.
Global Market List
U.S. stocks closed slightly lower on Wednesday, with intraday trading fluctuating as Fed meeting minutes showed that policy makers agreed that they need to maintain a more restrictive policy stance. September minutes also showed that many Fed officials stressed the cost of not doing enough to reduce inflation.
The recent market weakness is partly linked to investors' growing concerns that the Fed's aggressive rate hike could put , the world's largest economy, into recession. Interest-rate-sensitive utility stock fell 3.4%, while real estate stocks fell 1.4%, leading the decline among all sectors of the S&P 500. Quincy Krosby, chief global strategist at
LPLFinancial, said in a recent speech, Fed officials "unanimously stated that the Fed is committed to curbing inflation and will stick to it. There is now an understanding that the Fed will continue to raise interest rates. The question for the market is now, when will it go from 75 basis points to 50 basis points and 25 basis points. I think that's the focus of the market." At the September meeting, Fed officials raised interest rates by the third consecutive 75 basis points in an effort to pull inflation down from a 40-year high.
market rebounded after opening, as data released earlier showed unexpected rises in producer prices in September. Labor Department 's producer price index (PPI) rose 8.5% in the 12 months to September, slightly higher than the estimated 8.4%. However, it is still below 8.7% in August.
Thursday's US consumer price report is considered more critical, and investors have been waiting anxiously. At the same time, the U.S. third-quarter financial report season will also kick off, and some major U.S. banks will release financial reports on Friday. The S&P 500 Financial Stock Index closed down 0.3%.
Among the rising stocks, Pepsi (PepsiCoInc)
American Aluminum (AlcoaCorp)
No S&P 500 component stock hit a 52-week high, 78 component stocks hit a 52-week high, and 433 set a 52-week low. The U.S. exchanges have accumulated 10.01 billion shares, while the average daily trading volume in the past 20 trading days is 11.68 billion shares.
precious metals
gold prices remained firm on Wednesday, and the dollar and U.S. Treasury yields fell after the minutes of the Fed's last policy meeting were released, supporting the gold price. Fed policymakers agree that they need to turn to a more restrictive policy stance and then maintain it for a while to achieve its goal of reducing inflation.
Nevertheless, many members of the meeting said it was important that " calibration " further tighten the pace of policy, with the aim of mitigating the risk of significant adverse impact on the economic outlook.
In the early trading of the Asian market on Thursday (October 13), the dollar index traded around 113.25; the dollar climbed to a 24-year high against the yen on Wednesday, maintaining above the level that prompted Japanese officials to intervene last month, while the pound rebounded after a sharp decline in the previous trading day as investors were thinking about the Bank of England's next move; the dollar narrowed the gain after the minutes of the last meeting of the Federal Reserve showed some dovish colors; gold prices remained firm, and the US dollar and U.S. Treasury yields fell after the minutes of the Fed's last policy meeting were released, supporting the gold price; oil prices fell for the third consecutive day due to continued concerns about demand, the strengthening of the dollar and expectations of the major central bank's further rate hikes.
Commodity closing situation : Brent crude oil futures settlement price fell 2% to US$92.45 per barrel. U.S. crude oil futures settlement price fell 2.3% to $87.27 a barrel. US gold futures closed at $1,677.50, down 0.5%.
U.S. stock closing : The Dow Jones Industrial Average fell 0.1% to 29210.85 points; S&P 500 index fell 0.33% to 3577.03 points; Nasdaq index fell 0.09% to 10417.10.
Forecast on Thursday
15:30 European Central Bank Vice Governor Kimdos delivered a speech, 16:00 IEA released its monthly crude oil market report, and 19:00 Bank of England Monetary Policy Committee Member Mann delivered a speech.
Global Market List
U.S. stocks closed slightly lower on Wednesday, with intraday trading fluctuating as Fed meeting minutes showed that policy makers agreed that they need to maintain a more restrictive policy stance. September minutes also showed that many Fed officials stressed the cost of not doing enough to reduce inflation.
The recent market weakness is partly linked to investors' growing concerns that the Fed's aggressive rate hike could put , the world's largest economy, into recession. Interest-rate-sensitive utility stock fell 3.4%, while real estate stocks fell 1.4%, leading the decline among all sectors of the S&P 500. Quincy Krosby, chief global strategist at
LPLFinancial, said in a recent speech, Fed officials "unanimously stated that the Fed is committed to curbing inflation and will stick to it. There is now an understanding that the Fed will continue to raise interest rates. The question for the market is now, when will it go from 75 basis points to 50 basis points and 25 basis points. I think that's the focus of the market." At the September meeting, Fed officials raised interest rates by the third consecutive 75 basis points in an effort to pull inflation down from a 40-year high.
market rebounded after opening, as data released earlier showed unexpected rises in producer prices in September. Labor Department 's producer price index (PPI) rose 8.5% in the 12 months to September, slightly higher than the estimated 8.4%. However, it is still below 8.7% in August.
Thursday's US consumer price report is considered more critical, and investors have been waiting anxiously. At the same time, the U.S. third-quarter financial report season will also kick off, and some major U.S. banks will release financial reports on Friday. The S&P 500 Financial Stock Index closed down 0.3%.
Among the rising stocks, Pepsi (PepsiCoInc)
American Aluminum (AlcoaCorp)
No S&P 500 component stock hit a 52-week high, 78 component stocks hit a 52-week high, and 433 set a 52-week low. The U.S. exchanges have accumulated 10.01 billion shares, while the average daily trading volume in the past 20 trading days is 11.68 billion shares.
precious metals
gold prices remained firm on Wednesday, and the dollar and U.S. Treasury yields fell after the minutes of the Fed's last policy meeting were released, supporting the gold price. Fed policymakers agree that they need to turn to a more restrictive policy stance and then maintain it for a while to achieve its goal of reducing inflation.
Nevertheless, many members of the meeting said it was important that " calibration " further tighten the pace of policy, with the aim of mitigating the risk of significant adverse impact on the economic outlook."The market is looking for any signs of dove and is focusing on the word 'calibration', so the dollar is falling and gold is rising," he added, adding that the minutes should still be interpreted as hawkish, though.
US Consumer Price Index (CPI) data will be released on Thursday and is expected to continue to remain stubbornly high. spot silver fell 0.8% to $19.03 per ounce, platinum rose 0.2% to $886.94, and palladium rose 0.2% to $2144.68.
Crude Oil
Crude Oil Futures fell for the third consecutive day on Wednesday, due to continued concerns about demand, a strengthening of the dollar and expectations of further interest rate hikes from major central banks.
OPPEC (OPEC) and the U.S. Department of Energy have cut their demand estimates. Last week, OPEC, along with allies including Russia, agreed to reduce supply by 2 million barrels per day, driving prices to rise.
OPEC cut its global oil demand growth forecast for 2022 on Wednesday, the fourth cut since April, while also cutting forecasts for next year, citing slowdowns due to the pandemic and high inflation. "The world economy has entered a period of increasing uncertainty and rising challenges due to high inflation, tightening monetary policies of major central banks, high levels of sovereign debt in many regions, and continued supply problems."
OPEC said in the report. The U.S. Department of Energy lowered its estimates of U.S. output and demand for global production. The department now expects U.S. crude oil consumption to grow only 0.9% in 2023, down from the previous forecast of 1.7%. Globally, the sector expects consumption to grow by just 1.5%, down from the previous forecast of 2%.
The energy market is also facing pressure from the US dollar, which rebounds against low-yield currencies such as the Japanese yen. The Fed promised to continue hikes to stop high inflation, which boosted yields and made the U.S. currency more attractive to foreign investors. Fed officials agreed they need to raise interest rates to a more restrictive level and then stay there for some time to meet its target of reducing inflation, according to minutes of September policy meeting released by the Fed on Wednesday.
U.S. Petroleum Association (API) data said U.S. crude oil and gasoline inventories increased last week, while distillate inventories fell.
Crude oil inventories soared by about 7.1 million barrels in the week ended October 7, according to sources who spoke on condition of anonymity. Gasoline stocks increased by about 2 million barrels, while distillate stocks decreased by about 4.6 million barrels.
Forex
USD climbed to a 24-year high against the yen on Wednesday, maintaining above the level that prompted Japanese officials to intervene last month, while the pound rebounded after a sharp decline in the previous trading day as investors pondered the Bank of England’s next move.
The dollar narrowed its gains after the Fed's last meeting minutes showed some dovish colors. Several participants pointed out that it is important to calibrate the pace of further tightening to mitigate the risks facing the U.S. economy, minutes said. However, the Fed is still committed to raising interest rates to reduce inflation. "Maybe there is a little hope in the minutes, that is, basically officials are weighing the risk of excessive or excessive rate hikes, which is not the number one concern now. The number one concern is still inflation."
On the other hand, the pound rose after falling to a two-week low against the dollar and euro late Tuesday, after the Financial Times reported that the Bank of England had privately signaled banks to plan to extend its bond purchase plan.
data shows that U.S. producer prices increased more than expected in September, further boosting the US dollar against the Japanese yen. Final Demand Producer Price Index (PPI) rebounded 0.4%, higher than the forecasted rise of 0.2%. In the 12 months to September, the producer price index rose by another 8.5% after rising 8.7% in August.
After the release of PPI data in the United States, the US dollar rose to a maximum of 146.98 yen, the strongest since August 1998. New York rose 0.7% to 146.85 yen, the fifth consecutive trading day.
Japanese officials intervened on September 22 to block the depreciation of the yen for the first time since 1998, when the yen was lower than 145.90 against the US dollar.
Marc Chandler, chief market strategist at Bannockburn GlobalForex, New York, said: "This is just a reaffirm that the Bank of Japan is not defending a certain level, but is solving volatility issues," he added that the three-month yen volatility was lower on Wednesday than when Japan intervened last month.
three-month yen implicit volatility was 11.9%, while the high was 13.26% when Japan took action to support the yen on September 22. Officials reiterated that they are ready to take appropriate measures to deal with excessive fluctuations in the exchange rate , but it is not clear whether they want to defend a specific level. Treasury yields outside Japan were pushed up by the turbulent spillover effect of in the UK Treasury market.
Long-term UK Treasury yields jumped again, reaching a 14-year high for the 20-year high after Bank of England Governor Bailey reiterated late Tuesday that the central bank would end its emergency bond purchase plan on Friday and asked pension fund managers to complete rebalancing of their position by then.
pound fell to a two-week low of $1.0925 after Bailey's speech, a central bank spokesman reiterated that view on Wednesday. The pound later rebounded to $1.1083, up 1.2% after the Financial Times reported that the Bank of England hinted to private banks that it could extend its bond purchase period. The pound rose against the euro. In afternoon trading, the euro fell 1.2% to £0.8740. Among other currencies, the euro remains under pressure, down 0.1% at $0.9696. The risk-sensitive Australian dollar fell to a two-and-a-half low of $0.6236, while New York was flat at $0.6274 late in trading.
Market News
Fed meeting minutes: September economic forecast is slightly lower than July potential output will continue during the forecast period
Fed September meeting minutes show that the US economic forecast prepared by Fed staff for September FOMC meeting slightly lower than July's forecast. However, staff estimates for potential output in the near term have been significantly lowered due to continued disappointing growth in productivity and slow growth in labor force participation so far this year. Furthermore, it is expected that this lower path to potential output will continue throughout the forecast period. Therefore, staff estimates for output gaps have been significantly raised this year, and although staff forecasts still believe the output gap will narrow in the coming years, output levels are expected to be slightly above the potential levels by the end of 2025.
UK pension funds have made new moves in order to seek cash
More than UK companies are facing calls for urgent loans to their employees' pension plans, a pension fund's efforts to raise cash. After selling off the easiest assets to sell, the funds have been clearing their portfolios, looking for more ways to rebuild the cash buffer to cope with the requirement of margin for derivatives positions . Some pension funds especially want to protect their holdings of growth assets or investments with less liquidity, such as investments in infrastructure projects, which are expected to benefit the funds in the long run, people familiar with the matter said. A lawyer said his clients could total hundreds of millions of pounds for short-term emergency loans from businesses. Patrick Bloomfield, partner at Hymans Robertson, a pension and welfare consulting firm, said we have many large pension fund clients who have prepared emergency liquidity arrangements that will be obtained from businesses.
EU Energy Minister Informal Meeting Still failed to reach an agreement on natural gas price limit
On October 12th local time, EU Informal Meeting of Energy Ministers was held in Czech . All parties involved generally agreed to jointly purchase natural gas and promote energy conservation from the summer of 2023. However, in terms of natural gas price limits, countries still have serious differences and have not reached an agreement whether it is to limit the price limits on Russia's imported natural gas or the price limits on natural gas used for power generation.
Ukrainian officials hope that the EU will expand sanctions on Russia and Belarus
According to Ukrainian State News Agency, Ihor Zhovkva, deputy director of the Ukrainian Presidential Office, believes that the ninth round of sanctions on Russia by the EU should be to cut off other Russian banks from the SWIFT system, implement price restrictions or completely ban Russian natural gas exports, prevent ships from entering Russian ports, and impose visa bans on all Russians. Sanctions on Belarus should also be expanded. Zovkwa said Belarus' banking system should face the same restrictions as Russia.
White House Considering a retaliatory ban on Russian aluminum
The U.S. government is considering a complete ban on imports of Russian aluminum in response to escalation of Russian military operations in Ukraine. This resource has long been sanctioned as Russian aluminum is needed in various fields such as cars, skyscrapers to iPhones. According to people familiar with the matter, the White House is considering three options: one is to ban imports completely, the second is to raise tariffs to a punitive level, and the third is to sanction the United Co. Rusal International PJSC, which produces aluminum. The potential ban is reportedly in response to Russian missile attacks this week on Kiev and other Ukrainian cities, which destroyed critical infrastructure and civilian facilities.
Putin : Russia will start the construction of the Mongolian section of "Siberian Power 2" in the near future
Russian President Putin said that Russia will continue to expand energy exports in a rapidly growing market and will carry out the construction of promising projects in the near future, including the Mongolian section of "Siberian Power 2". Putin said at the "Russian Energy Week" forum: "We will continue to expand energy exports in a fast-growing market. Of course, we intend to expand our supply scope. To this end, we will determine key infrastructure in the near future and start construction work, including promising projects such as "Siberian Power 2" and "Alliance East" in Mongolia section, and connect with the Asian and European parts of the national gas transmission system. We will continue to liquefied natural gas receiving station project provides support." (Russian Satellite Network)
Russian Vice Prime Minister: Russia's oil extraction volume is expected to reach 530 million tons this year
According to TASS on October 12, Russian Vice Prime Minister Novak said at the "Russian Energy Week" event held on the same day that Russia may exploit 520 million to 530 million tons of oil in 2022. According to data from the Central Dispatch Bureau of the Russian Fuel Energy Complex, the exploitation volume of all Russian oil and condensate oil in 2021 increased by 22.2% year-on-year to 524 million tons. This year is the fifth time Russia has held the "Russian Energy Week" forum, which aims to provide a platform for discussing the development trends of the modern energy system.
This article is from Huitong.com
Marc Chandler, chief market strategist at Bannockburn GlobalForex, New York, said: "This is just a reaffirm that the Bank of Japan is not defending a certain level, but is solving volatility issues," he added that the three-month yen volatility was lower on Wednesday than when Japan intervened last month.
three-month yen implicit volatility was 11.9%, while the high was 13.26% when Japan took action to support the yen on September 22. Officials reiterated that they are ready to take appropriate measures to deal with excessive fluctuations in the exchange rate , but it is not clear whether they want to defend a specific level. Treasury yields outside Japan were pushed up by the turbulent spillover effect of in the UK Treasury market.
Long-term UK Treasury yields jumped again, reaching a 14-year high for the 20-year high after Bank of England Governor Bailey reiterated late Tuesday that the central bank would end its emergency bond purchase plan on Friday and asked pension fund managers to complete rebalancing of their position by then.
pound fell to a two-week low of $1.0925 after Bailey's speech, a central bank spokesman reiterated that view on Wednesday. The pound later rebounded to $1.1083, up 1.2% after the Financial Times reported that the Bank of England hinted to private banks that it could extend its bond purchase period. The pound rose against the euro. In afternoon trading, the euro fell 1.2% to £0.8740. Among other currencies, the euro remains under pressure, down 0.1% at $0.9696. The risk-sensitive Australian dollar fell to a two-and-a-half low of $0.6236, while New York was flat at $0.6274 late in trading.
Market News
Fed meeting minutes: September economic forecast is slightly lower than July potential output will continue during the forecast period
Fed September meeting minutes show that the US economic forecast prepared by Fed staff for September FOMC meeting slightly lower than July's forecast. However, staff estimates for potential output in the near term have been significantly lowered due to continued disappointing growth in productivity and slow growth in labor force participation so far this year. Furthermore, it is expected that this lower path to potential output will continue throughout the forecast period. Therefore, staff estimates for output gaps have been significantly raised this year, and although staff forecasts still believe the output gap will narrow in the coming years, output levels are expected to be slightly above the potential levels by the end of 2025.
UK pension funds have made new moves in order to seek cash
More than UK companies are facing calls for urgent loans to their employees' pension plans, a pension fund's efforts to raise cash. After selling off the easiest assets to sell, the funds have been clearing their portfolios, looking for more ways to rebuild the cash buffer to cope with the requirement of margin for derivatives positions . Some pension funds especially want to protect their holdings of growth assets or investments with less liquidity, such as investments in infrastructure projects, which are expected to benefit the funds in the long run, people familiar with the matter said. A lawyer said his clients could total hundreds of millions of pounds for short-term emergency loans from businesses. Patrick Bloomfield, partner at Hymans Robertson, a pension and welfare consulting firm, said we have many large pension fund clients who have prepared emergency liquidity arrangements that will be obtained from businesses.
EU Energy Minister Informal Meeting Still failed to reach an agreement on natural gas price limit
On October 12th local time, EU Informal Meeting of Energy Ministers was held in Czech . All parties involved generally agreed to jointly purchase natural gas and promote energy conservation from the summer of 2023. However, in terms of natural gas price limits, countries still have serious differences and have not reached an agreement whether it is to limit the price limits on Russia's imported natural gas or the price limits on natural gas used for power generation.
Ukrainian officials hope that the EU will expand sanctions on Russia and Belarus
According to Ukrainian State News Agency, Ihor Zhovkva, deputy director of the Ukrainian Presidential Office, believes that the ninth round of sanctions on Russia by the EU should be to cut off other Russian banks from the SWIFT system, implement price restrictions or completely ban Russian natural gas exports, prevent ships from entering Russian ports, and impose visa bans on all Russians. Sanctions on Belarus should also be expanded. Zovkwa said Belarus' banking system should face the same restrictions as Russia.
White House Considering a retaliatory ban on Russian aluminum
The U.S. government is considering a complete ban on imports of Russian aluminum in response to escalation of Russian military operations in Ukraine. This resource has long been sanctioned as Russian aluminum is needed in various fields such as cars, skyscrapers to iPhones. According to people familiar with the matter, the White House is considering three options: one is to ban imports completely, the second is to raise tariffs to a punitive level, and the third is to sanction the United Co. Rusal International PJSC, which produces aluminum. The potential ban is reportedly in response to Russian missile attacks this week on Kiev and other Ukrainian cities, which destroyed critical infrastructure and civilian facilities.
Putin : Russia will start the construction of the Mongolian section of "Siberian Power 2" in the near future
Russian President Putin said that Russia will continue to expand energy exports in a rapidly growing market and will carry out the construction of promising projects in the near future, including the Mongolian section of "Siberian Power 2". Putin said at the "Russian Energy Week" forum: "We will continue to expand energy exports in a fast-growing market. Of course, we intend to expand our supply scope. To this end, we will determine key infrastructure in the near future and start construction work, including promising projects such as "Siberian Power 2" and "Alliance East" in Mongolia section, and connect with the Asian and European parts of the national gas transmission system. We will continue to liquefied natural gas receiving station project provides support." (Russian Satellite Network)
Russian Vice Prime Minister: Russia's oil extraction volume is expected to reach 530 million tons this year
According to TASS on October 12, Russian Vice Prime Minister Novak said at the "Russian Energy Week" event held on the same day that Russia may exploit 520 million to 530 million tons of oil in 2022. According to data from the Central Dispatch Bureau of the Russian Fuel Energy Complex, the exploitation volume of all Russian oil and condensate oil in 2021 increased by 22.2% year-on-year to 524 million tons. This year is the fifth time Russia has held the "Russian Energy Week" forum, which aims to provide a platform for discussing the development trends of the modern energy system.
This article is from Huitong.com
