On Tuesday (July 9), during the European session, the British pound against the US dollar hit a low of 1.2440 since April 2017. Investors bet that the world’s major central banks will turn to loose, the UK will follow suit and increase its holdings of short positions. At the same time, the uncertainty surrounding the Brexit and the new prime minister has also exacerbated the weakness of the pound. With the approach of October 31, the impact of Brexit will increase. Analysts warned against underestimating the risk of a UK failure to leave the EU. Mitsubishi UFJ Bank and Mizuho International said that if Johnson’s UK prime minister position is confirmed this month, the risk premium may rise. Neil Jones, head of foreign exchange sales at Mizuho Hedge Fund , said the market seriously underestimated the possibility of a UK non-official exchange . Although the volatility is still low, it is worthwhile to make some hedging for the risk of falling from October to December. Focus on UK GDP data on Wednesday.

During European time, the Australian dollar fell more than 0.5% against the US dollar, hitting a new low of more than two weeks to 0.6929. As the US dollar strengthened and the market risk sentiment remained cautious, the data showed that the Australian business confidence index deteriorated further, which made investors bet on the Reserve Bank of Australia. There may be further interest rate cuts during the year, and this news directly pushes the Australian dollar back into the market. At the same time, global investors still face uncertainty about the prospects of the trade situation, which will also suppress the upside of commodity currencies. Moreover, the market is waiting for Fed Chairman Powell’s speech later. After the US non-farm payrolls data improved last week, investors further lowered their bets on the Fed’s loose prospects, which made the US dollar index regain strength on Tuesday. Non-US currencies face additional pressure.

★ important financial data ★

July 10 00:00 EIA announces monthly short-term energy outlook report.

July 10th 04:30 US as of July 5th week, API crude oil / gasoline / refined oil / Cushing stock changes.

★Recent hotspots★

1. [White House Economic Advisor Kudlow: Powell’s position is safe and there is no need to fire him.]
Powell’s position is safe and there is no need to fire him. Supporting the independence of the Fed, but the president and others have the right to say what they think, the dollar should be stable and reliable, and Trump fears that other currencies are too weak. I don’t think the US budget deficit is a serious problem.

2. [US President Trump said that India’s tariffs on US products are unacceptable]

3. [Malaysia central bank keeps interest rate unchanged, due to uncertain economic outlook] 
1 Malaysia’s central bank kept its benchmark interest rate unchanged on Tuesday, taking cautious attitude toward policy easing when the global economy is uncertain; the bank kept overnight interest rate unchanged at 3% As predicted by 25 of the 28 economists surveyed, the remaining 3 are expected to cut interest rates by 25 basis points;
2 According to the current policy interest rate level, monetary policy positions remain relaxed and support economic activities; the Monetary Policy Committee will continue to assess domestic The balance between growth and inflation risks to ensure that monetary policy stance is still conducive to sustainable economic growth in the face of stable prices.

4. [At present, Saudi Arabia’s exports to South Korea and Japan are decreasing, and exports to China are increasing.]
1 The latest data show that from January to May this year, South Korea imported 1.266.48 billion barrels of crude oil from Saudi Arabia, down from 1.2822 in the same period last year. In the first five months of this year, Japan’s crude oil imports from major oil producing countries in the Middle East also fell by 5.5% year-on-year to 1.169 million barrels per day.
2 Saudi Arabia’s national oil company still firmly controls Asia’s largest oil consumer. . According to the latest data from the General Administration of Customs of China, from January to May this year, China imported 2.2385.8 billion barrels of crude oil from Saudi Arabia, an increase of 9.8% from 288.1 million barrels in the same period of last year.

5. [Reporter: Russia’s oil production fell to a three-year low in
early July ] Russia’s oil production in early July fell to a three-year low of 10.79 million barrels per day, dragged down by the decline in production by Rosneft. This is the lowest output level since August 2016, when the output was 10.71 million barrels per day. The average production in June was 11.15 million barrels per day; Russia’s oil production may still pick up this month, as in June, when production in early June fell to 10.87 million barrels per day; an industry source also said that Russian oil Production on July 1-8 decreased by 11% from the June average.

★ European time foreign exchange market review ★

During European time, the US dollar index hit a new three-week high of 97.5932. Although the market still believes that the Fed will cut interest rates by 25 basis points, it seems that market sentiment has changed. Traders are weighing stronger-than-expected US non-farm payrolls in June after the release of the Federal Reserve. The space for interest rate cuts. White House economic adviser Kudlow said that Powell’s position is safe and there is no need to fire him. Supporting the independence of the Fed, but the president and others have the right to say what they think, the dollar should be stable and reliable, and Trump fears that other currencies are too weak. In addition, the congressional testimony of Federal Reserve Chairman Powell on Wednesday may have an impact.

During European time, the euro fell against the dollar, hitting a new low of 1.1193 in the past three weeks. Although the market still believes that the Fed will cut interest rates by 25 basis points, it seems that the market sentiment has changed and the dollar has rebounded to a three-week high. In addition, the fundamentals of the Eurozone are still weak. At the same time, it has been affected by the restructuring of Deutsche Bank and the uncertain future of Brexit, and the market’s expectation of the European Central Bank’s restart of QE is also after the speech of the European Central Bank’s Executive Committee, Cory, earlier this week. Further ignited. In addition, the market is waiting for Powell’s congressional testimony on Wednesday night.

During European time, the pound plunged 0.5% against the US dollar, hitting a low of 1.2440 since April 11, 2017. Investors bet that the world’s major central banks will turn to easing as the UK will follow suit and increase its holdings of short positions. At the same time, the uncertainty surrounding the Brexit and the new prime minister has also exacerbated the weakness of the pound. According to the latest data released by the US Commodity Futures Trading Commission (CFTC), the speculative short position of the pound expanded to 4.68 billion US dollars, the highest since the beginning of February. With the approach of October 31, the impact of Brexit will increase. Analysts warned against underestimating the risk of a UK failure to leave the EU. Mitsubishi UFJ Bank and Mizuho International said that if Johnson’s UK prime minister position is confirmed this month, the risk premium may rise. In recent weeks, the options market’s perception of the outlook for the next six months of the pound is more pessimistic than the three months ended October 31. The sterling risk reversal shows that the six-month sterling put option demand is higher than the three-month period. Neil Jones, head of foreign exchange sales at Mizuho Hedge Fund, said the market seriously underestimated the possibility of a UK non-official exchange. Although the volatility is still low, it is worthwhile to make some hedging for the risk of falling from October to December. Focus on UK GDP data on Wednesday.

During European time, the dollar oscillated higher against the yen, hitting a new high of 108.96 since June, but still facing resistance at the 109 mark. The US dollar index remained strong ahead of the release of Fed Chairman Powell’s testimony. The market was betting that after the good non-agricultural report was released last week, the Fed is trying to further stabilize the market’s expectations for future loose action. This trading sentiment made the dollar stronger against a basket of G10 currencies. However, the still unstable market risk appetite still suppressed the USD/JPY trend, which made the yen exchange rate still smaller than other non-US currencies, especially European currencies. For trade issues and the global geopolitical situation, investors continue to look closely.

During European time, the Australian dollar fell more than 0.5% against the US dollar, hitting a new low of more than two weeks to 0.6929. As the US dollar strengthened and the market risk sentiment remained cautious, the data showed that the Australian business confidence index deteriorated further, which made investors bet on the Reserve Bank of Australia. There may be further interest rate cuts during the year, and this news directly pushes the Australian dollar back into the market. At the same time, global investors still face uncertainty about the prospects of the trade situation, which will also suppress the upside of commodity currencies. Moreover, the market is waiting for Fed Chairman Powell’s speech later. After the US non-farm payrolls data improved last week, investors further lowered their bets on the Fed’s loose prospects, which made the US dollar index regain strength on Tuesday. Non-US currencies face additional pressure.

During European time, US oil rose to around $57.7 per barrel, although long-delayed international trade disputes have had a negative impact on the world’s major economies, leaving investors worried about demand prospects. But tensions in the Middle East have supported oil prices. Iran threatened on Monday to re-enable the previously sealed centrifuge and increase the enriched uranium abundance to 20%. Iran will not let the British plunder an Iranian tanker near Gibraltar last week.

During European time, spot gold hit a one-week low of 1,385.87 US dollars / ounce, the main reason for the pressure on the gold price is that the US dollar index continues to be strong, and the market’s future loose expectations for the Fed are further cooled. After that, Federal Reserve Chairman Powell will deliver a congressional testimony. The policy roadmap for the second half of this year will be revealed, but from the recent statements of Fed officials, combined with the good non-agricultural employment data released last week, Powell will not be clear. Pointing out the specific road map for interest rate cuts, this will disappoint the dollar shorts, and investors’ early bets on this push also strengthen the US dollar. However, the expected fall in the Fed’s interest rate cuts also caused the US stocks to fall back, pushing up the market risk aversion, so that the spot gold price still has considerable support. The short-term gold price support is still at the level of 1,382 US dollars. After the fall, it will open to the space of 1366 US dollars. The resistance range is at the level of $1,405-10.

Institutional perspective

[Barclays adjusts emerging market currency expectations]
1 “As the G-20 summit results and US data are better than expected, we adjust our two-way forecast against the US dollar: cancel short-term depreciation expectations and weaken long-term appreciation expectations,” said Marvin Barth and other strategists. A report to the client writes;
2 that the currencies of economies with better domestic demand and lower openness have shown a lower tendency to depreciate in previous forecasts, so they are also raised in the latest forecast. Small; these currencies include the Brazilian Real and the Indian Rupee.

[Morgan Stanley: Extra stimulus for the European Central Bank is necessary]
1 Low-speed growth and below-target inflation make us believe that the ECB now believes that additional stimulus measures are necessary; this may mean restarting its asset purchases. Plan, but the exact time and scale are uncertain;
2 Although the display and expectations may be different, our assumption is that the ECB may start buying a 45 billion euro bond plan every month as early as the fourth quarter of this year, and It will be announced in September.

[Morgan Stanley cut global stock market expectations, fearing that global GDP growth will offset the role of central bank policies]
1 Chief Cross-asset strategist Andrew Sheets said in the report that although the market has expectations for a more lenient policy of the Fed, But investors can’t ignore the possibility of weak economic growth in the next few months;
2 In the face of weak economic data, the market should be worried, not because it may bring the central bank’s easing policy. The market is too optimistic about this year’s revenue, underestimating the pressures of inventory, wages and trade uncertainty;
3 The report points out that the positive effects of easing may be offset by weak growth. What investors don’t realize is that whenever easing policies experience weak growth, the latter’s impact on the stock market is always greater. The market has not fully accounted for the lower-than-expected impact of each company’s full-year expectations;
4 It is reported that Morgan Stanley currently allocates less stocks and credits, and allocates more cash. Its favorite asset is emerging market fixed-income assets.

【道明证券：金价的涨势暂时已经耗尽】
① 在新一轮看涨情绪将金价推高至每盎司1500美元的水平之前，金价可能仍将保持区间波动；
强劲的美国经济数据将在今年馀下时间限制金价，因市场无法从美联储的表现中看出价格；
② 在未来6个月的大部分时间里，黄金投资者可能会押注美联储将降息，但幅度不会像美联储基金期货曲线所显示的那么大；
③ 稳定的通胀和美国经济数据依然良好，使美联储无法说服交易员继续做多黄金；
④ 最新的宏观经济数据对黄金造成负面影响的例子是，在美国6月新增22.4万个黄金仓位后，黄金价格在上周五北美市场交易时段跌破每盎司1400美元。

[Absolute Strategy Research survey shows that the global economic recession risk is currently at a high level for at least four years]
1 As the central bank responds to signs of growing vulnerability in major economies, the global bond market has risen in recent weeks. ASR’s survey suggests that bond gains are not a flash in the pan;
2 According to the survey, investors expect a 45% global economic recession in the next 12 months. Investors have also changed their perception of the direction of the bond market. Most people now expect short-term US Treasury yields to fall in a year, while more than half of respondents in March believe that yields will rise;
3 expectations for European long-term bond yields and record low bond yields to rebound Almost wiped out;
4 Bullish government bonds often indicate increased concerns about the economic outlook and more cautious outlook on the stock market. According to ASR’s survey, global stock market and corporate profits will decline slightly in the coming year;
5 ASR research director David Bowers said that even though, US stock indexes have hit record highs recently, stock investors have not shown pessimism in the bond market;
6 The survey reflects that the market is basically in a state of tension. Given the high risk of recession, the outlook for profitability is expected to be even worse. But the underlying assumption is that the stock’s profit risk is not that big;
7 Fund managers’ perceptions of the dollar are more pessimistic than at any time in the past five years. A weaker dollar is good news for the precious metals , and nearly two-thirds of investors expect gold prices to rise next year.