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On February 25, Morgan Stanley published a research report stating that due to the continued sales pressure of traditional drugs, it decided to further reduce the sales forecast of Shijiazhuang Pharmaceutical Group (01093.HK) by 2.1% in 2024; the sales forecast for 2025 was raised by 3.5%; and the sales forecast for 2026 was raised by 2.7%. Morgan Stanley mentioned that since Shijiazhuang Pharmaceutical attaches great importance to research and development, it has raised its forecast for its research and development expenses, which is partially offset by lower sales expenses. The bank adjusted its profit forecasts for fiscal years 2024 to 2026 by -14%, +10% and -4.3%, respectively. In addition, the bank lowered its capital expenditure forecast for Shijiazhuang Pharmaceutical in the next few years to 7% per year (originally 9%), and slightly raised its target price from HK$6.6 to HK$6.8, giving it an overweight rating.On February 25, Goldman Sachs Group said that the possible tariffs imposed by the United States on oil imports would bring a bill of $22 billion to consumers. Goldman Sachs analysts including Callum Bruce said that the Trump administration has proposed possible tax plans, including taxes on oil from Canada and Mexico, which means the cost per household (passed on) is equivalent to $170. The analysts also said: "We found that a 10% tariff on crude oil in the United States would not significantly increase US production because the light oil produced in the United States does not match the heavy oil required by many US refineries. At the same time, if a 10% tariff is imposed, the average retail price of gasoline may increase by 7 cents per gallon."Market news: Indonesia and Apple are said to have reached an agreement on terms to lift the iPhone 16 ban.According to Tianyancha’s intellectual property information on February 25, the “human-machine interface display method, system and vehicle for amphibious vehicles” applied by Chery Automobile Co., Ltd. was recently announced. The abstract shows that the present invention responds to the switching of the current operating mode of the amphibious vehicles. When the current operating mode of the amphibious vehicles is identified as flight mode, the real-time flight screen, flight status information and then the base station monitoring personnel video connection screen are displayed in each sub-display area; when the current operating mode of the amphibious vehicles is identified as driving mode, the land driving screen and the map navigation interface are displayed in each sub-display area. This achieves comprehensive monitoring of the status of amphibious vehicles, allowing the driver to respond to changes in the external environment in a timely manner and improve the flexibility and efficiency of operations. The integration of base station monitoring video strengthens the collaborative work between ground control and aircraft, and improves emergency response speed and mission execution efficiency.Government data showed that Saudi Arabias non-oil exports increased by 18.1% year-on-year in December last year, oil exports fell by 10.0% year-on-year, and merchandise exports fell by 2.8% year-on-year; imports increased by 27.1% year-on-year.

EUR/USD falls to 1.0850 as German/US Data escalates the ECB-Fed Conflict

Alina Haynes

Feb 01, 2023 15:32

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Mid-1.0800s intraday support is reestablished for EUR/USD on Wednesday morning, reversing Tuesday's rebound gains. This demonstrates the market's uneasiness ahead of the Federal Open Market Committee (FOMC) meeting. German economic risks to the EU, as well as mixed data from the United States and fears that Fed Chairman Jerome Powell will yet support hawks, might potentially weigh on the currency.

 

The Eurozone's Gross Domestic Product (GDP) for the fourth quarter (Q4) climbed 0.1% quarter-over-quarter (QoQ) on Tuesday, compared to 0.0% expected and 0.3% earlier. The year-over-year statistics were also good for the bloc, topping the market consensus of 1.8% to achieve 1.9%, compared to 2.3% previously. Nevertheless, German Retail Sales decreased 5.3% month-over-month in December, which was substantially worse than expected. Earlier in the week, the German GDP likewise disappointed EUR/USD pair speculators.

 

In contrast, the US Employment Cost Index (ECI) for the fourth quarter declined to 1.0% compared to market estimates of 1.1% and previous readings of 1.2%. In addition, the Conference Board (CB) Consumer Confidence index dropped from 108.3 to 107.10 in January. The US Chicago Purchasing Managers' Index (PMI) for January, which rose to 44.3 vs 41 expected and 44.9 previous readings, does not merit substantial attention.

 

Aside from the United States, higher profit reports from industry leaders including General Motors, Exxon, and McDonald's alleviated the economic downturn and lifted Wall Street indices. Nevertheless, the Dow Jones Industrial Average (DJIA), the S&P 500, and the Nasdaq all reported daily gains of greater than 1.0% on the previous trading day. In contrast, the yields on 10-year US Treasury notes reversed a three-day rise and returned to 3.51 percent, while their two-year equivalents plummeted to 4.20 percent.

 

It should be noted that JP Morgan's annual survey uncovered a reduction in inflation fears and a rise in recession fears, which tests the risk profile in the middle of pre-Fed anxiety. In spite of this, the world's largest rating agency, Fitch, forecasts that the US Consumer Price Index (CPI) would moderate to the mid-3.0% band in 2023 and the high-2.0% range in 2024, putting pressure on EUR/USD bears.

 

As a result of these variables, S&P 500 Futures see minor losses, while US Treasury bond rates remain sluggish and halt their slide from the previous day. This allows the EUR/USD pair to prepare for the Federal Reserve's dovish rate hike of 0.25 percentage points.

 

While the 0.25 basis point Fed rate hike is virtually expected and has been priced in, EUR/USD traders will also pay close attention to January activity data and Jerome Powell's ability to defend aggressive rate hikes.


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