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On April 27, Huawei Qiankun Intelligent Automotive Solutions officially released the "Intelligent Assisted Driving Safety Initiative" today. In the initiative, a total of 11 auto brands executives signed, including GAC, SAIC, JAC, Audi, Dongfeng Mengshi, Lantu, Deep Blue Auto, BAIC, Avita, Seres, Chery Automobile, etc.On April 27, the official website of the State Financial Supervision and Administration showed that Xu Xiaozheng, deputy director of the Inclusive Finance Department, has been appointed as member of the Party Committee and deputy director of the Shenzhen Regulatory Bureau of the Financial Supervision Administration.On April 27, since February this year, the tariff increase policies issued by the United States have caused fluctuations in the cross-border e-commerce industry. Mai Li Ni, a senior practitioner in cross-border e-commerce, talked about the recent tariff policy of the United States with obvious helplessness in his tone. He said that his most personal feeling is that this directly hit the survival space of e-commerce companies, freezing the entire industry and even the supply chain. The price comparison platform "Smart Exploration" said that they monitored 930 Amazon products that have increased in price since April 9. With the sharp increase in tariffs, the average price increase of these products reached 29%, covering multiple categories such as clothing, household goods, electronic products and toys. There are also several e-commerce platforms that announced that due to the increase in operating costs caused by "recent changes in global trade rules and tariffs", price adjustments will be implemented from April 25. Commodity prices have soared, and consumers and companies are under double pressure. In this regard, Mai Li Ni said that it is difficult for the US government to achieve its desired "manufacturing return" so simply by imposing tariffs.Conflict situation: 1. According to the Ukrainian Pravda: Russia lost 1,110 soldiers in the past 24 hours. 2. The Russian Chief of General Staff said that the Kursk region has been completely recovered, and the Ukrainian side said that this statement is untrue. 3. The Ukrainian military: Our troops continue to operate in the Belgorod Oblast of Russia. 4. According to the Ukrainian National News Agency: The Russian army launched 414 attacks in the Zaporizhia region at night. 5. A Russian drone attacked a nine-story residential building in the industrial area of Dnipropetrovsk, Ukraine, killing one person and injuring at least three people, including a child. 6. According to the Polish Armed Forces, a Russian military helicopter crossed Polish airspace and entered the Baltic territorial waters. The nature of the incident shows that Russia is testing the defense readiness of Polands air defense system. Peace talks: 1. Ukraine said it still takes time to finalize the text of the Ukrainian-US mineral agreement. 2. Zelensky announced a meeting with Trump and emphasized the realization of a comprehensive and unconditional ceasefire. 3. Russian Foreign Minister: Russia will not disclose the progress of the negotiations before the conclusion of the Russian-US negotiations on Ukraine. 4. Ukrainian President Zelensky is reportedly scheduled to meet with European Commission President von der Leyen on Saturday. 5. Ukrainian Presidential Office: Ukrainian President Zelensky met with French President Macron. 6. According to Interfax: Russian President Putin confirmed during a meeting with US Special Envoy Vitkov that Russia is ready to negotiate with Ukraine without preconditions. April 27, a person familiar with the matter said on Saturday that the European Central Bank has set up a special task force led by Vice President Guindos, which will seek ways to simplify European banking rules. The source said that the central bank governors of Germany, France, Italy and Finland also participated in the working group. However, the European Central Bank has no right to amend the rules-this is the prerogative of the European legislature in Brussels, so any recommendations of the special task force must be submitted to Brussels for review. It is reported that this action stems from a letter jointly sent by the governors of the central banks of Germany, France, Italy and Spain to the European Commission this year, calling for the simplification of "overly complex" European banking rules.

Stocks, Oil, Gold, and Forex Analysis: Pervasive Pessimism Regarding the US Economy

Larissa Barlow

Apr 19, 2022 09:43

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Analysis of the Global Macroeconomic Environment and Stock Markets 

US markets were little moved in thin trade Monday, with the S&P 500 remaining unchanged. The bond sell-off continued, with US 10-year rates rising 3 basis points to 2.85 percent, their highest level since December 2018.

 

Bullard of the Federal Reserve "would not rule out" a 75bp rate hike, but notes that this is "not the base case." According to the Taylor rule, 3.5 percent is the "minimum neutral rate."

 

The US dollar receives support from the Fed rate rise channel. Several dovish-leaning officials expressed support for a 50bp raise in May last week, while March's weaker inflation data did not dramatically alter policymakers' assessments of the tightening trajectory, implying that several fifty-bp Fed hikes remain the market's basic case. And the fact that Bullard is discussing a 75-bp raise indicates that other hawks are on the same page.

 

Q1 profits are on everyone's mind, with bellwether prints beginning to trickle in this week.

 

Equities continued to trade in a range, but the tape is more attractive for sellers following last week's big growth underperformance. Additionally, investors feel that the path of least resistance remains lower due to the continued inflation shock, imminent quantitative tightening, and dwindling fiscal stimulus.

 

Over in Asia, the sole ray of hope for Chinese shares is the current state of investor confidence and positioning.

 

One of the most serious issues is that finding dissenting voices on the global march toward recession is becoming increasingly difficult. The economy's negative is ubiquitous, and this alone can drive stock pickers away.

Fundamental Analysis of Oil

Oil had a strong overnight performance, but we are still in a tractor pull between global supply shortages and China's severe demand squeeze.

 

On a more optimistic side, Shanghai is aiming for a lockdown turning point by Wednesday, despite the outbreak's apparent spread to further locations. However, restoring mainland cities is important for a sustained economic oil that sustains oil demand.

 

Supply fears following Libya's closure of its largest oil field Monday and warning of additional outages as protests against the prime minister take place at the facility continue to demonstrate how bullishly reactive oil markets have become to supply shocks. And, without a doubt, more are sure to follow, shedding light on the growing global supply imbalance.

 

Given public opinion, the EU seems increasingly likely to implement a phased-in embargo on Russian oil, and this concept alone should be sufficient to keep oil bids on dips.

 

If the EU moves up with an oil embargo, it will be difficult for US oil to make up for the EU's deficit.

Fundamental Analysis of Gold

Fed Bullard dampened the rise overnight by hinting he would not rule out a 75-basis point move.

 

Despite the more hawkish Fed driving 10-year Treasury yields higher and the US currency stronger, the protracted Ukraine war narrative and the threat of EU penalties on Russian oil should keep gold bids on the defensive.

 

Gold immediately benefits from the inflationary repercussions of the Russia-Ukraine conflict, which are currently more significant than direct military events in the market.

Fundamental Analysis of the Forex Market 

The US Dollar versus the Japanese Yen 

The BoJ's verbal intervention facilitated the purchase of USD/JPY at more favorable rates. With increased oil prices to begin the week, the USDJPY has risen to 127. Still, in my opinion, we are edging closer to intervention area, and for those seeking to hedge against that possibility, now may be an opportune opportunity to leg in.

 

The Bank of Japan and government speakers have reached a point where verbal intervention amounts to little more than offering bulls of the USDJPY stronger buying levels. If the BoJ is serious about reversing the JPY's upward trend, it should abandon the intervention channel and begin implying rate hikes or adjusting the YCC to demonstrate a wider tolerance for domestic yields rising.

 

A weaker JPY, greater hedging costs, increased volatility, and a rise in Japanese domestic yields mean that US fixed income is less appealing to Japanese investors. Thus, despite the start of the Japanese fiscal year, it is prudent to anticipate lower demand, which implies that there may be some interest to buy JPY on repatriation flows. Bloomberg reported last week that Japan had repatriated about JPY 1.7 trillion in foreign debt.