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February 9th - The overnight SHIBOR was 1.2700%, down 0.70 basis points; the 7-day SHIBOR was 1.5050%, up 7.00 basis points; the 14-day SHIBOR was 1.5840%, up 8.00 basis points; the 1-month SHIBOR was 1.5500%, unchanged from the previous trading day; and the 3-month SHIBOR was 1.5800%, unchanged from the previous trading day.On February 9th, NIO founder, chairman, and CEO William Li announced plans to build 1,000 new battery swapping stations by 2026, increasing the number of "scenic charging routes" to 100. Following the completion of the G318 Sichuan-Tibet and Yunnan-Tibet battery swapping routes last year, the Silk Road battery swapping route will be opened this year. Furthermore, large-scale construction of the fifth-generation battery swapping stations will begin this year.February 9th - BNP Paribas economists stated that the ruling Liberal Democratic Partys (LDP) victory in the general election is expected to further strengthen its stringent economic policies. Their research report noted, "While there are still cautious opinions within the LDP regarding a consumption tax cut, the likelihood of its implementation has significantly increased given the election results." Analysts believe that considering the Prime Ministers public commitment to implementing the consumption tax cut by fiscal year 2026 and his overwhelming victory, the government is likely to accelerate the implementation of this measure while remaining focused on market stability. The report also pointed out that the LDPs victory could make it easier for the Takashimakata municipal government to push through the increased defense spending requested by the United States.On February 9th, Bank of America Securities issued a report stating that Meitu (01357.HK) expects its non-GAAP adjusted net profit for last year to grow by 60% to 66%, to RMB 938 million to RMB 973 million, with a median growth of 63% to RMB 955 million, slightly higher than market expectations and Bank of Americas forecast by 1%. This is mainly driven by two factors: rapid growth in product revenue and operating leverage. Bank of America Securities maintains its "Buy" rating on Meitu with a target price of HKD 11.3, based on the strong profit expansion driven by the increase in the proportion of paying users and operating leverage.On February 9th, Daiwa Securities issued a report stating that Yum China (09987.HK)s fourth-quarter results for 2025 exceeded expectations. KFCs same-store sales growth was better than anticipated, and the price increase for delivery channels in January indicated a recovery in consumer confidence and a more rational pricing trend in the industry. The report noted that Yum Chinas management forecasts a slight year-on-year increase in operating profit margin for 2026, but with improved competition in the Chinese market, further room for profit margins to exceed market expectations is anticipated. Daiwa reiterated its "Buy" rating on Yum China and raised its target price from HK$450 to HK$520.

EUR/USD Expects Fourth Weekly Gains Above 1.0900 Despite The US Dollar's Rebound Advance Ahead Of US NFP

Daniel Rogers

Apr 07, 2023 11:42

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Despite a recent retreat, the EUR/USD bulls maintain control around 1.0920. This reflects the typical Good Friday inactivity and apprehension ahead of the US Nonfarm Payrolls (NFP) report released early in the day. The major currency pair was volatile on Thursday as a result of the US Dollar's initial rebound on fears of a recession, but ended the day unchanged as disappointing US data contrasted with stronger Eurozone data.

 

Fears of a recession in the world's largest economy were prompted by consecutive lackluster US data and falling US Treasury bond yields, giving USD bears a reprieve on Thursday morning. As traders prepared for the all-important NFP, the dollar's subsequent gains were reversed by another disappointing US employment report.

 

Despite this, US Initial Jobless Claims for the week ending March 31 rose to 228K from 200K anticipated and an upwardly revised 246K the prior week. Notable is the increase in Challenger Job Cuts from 77,77K to 89,703K in the given month.

 

Notably, Reuters fanned fears of a recession by citing the most recent decline in the preferred bond market indicator of Federal Reserve (Fed) Chairman Jerome Powell. The most reliable bond market indicator of an imminent economic contraction, according to Federal Reserve research, is the "near-term forward spread" between the forward rate on Treasury bills 18 months from now and the current yield on three-month Treasury bills.

 

According to Reuters, International Monetary Fund (IMF) Managing Director Kristalina Georgieva stated in prepared remarks on Thursday that the global economy is projected to expand by less than 3% in 2023, a decrease from 3.4% in 2022.

 

In other news, Germany's Industrial Production (IP) increased 0.6% year-over-year in February, versus market predictions of -2.7% and previous readings of -1.7%. Additionally, the monthly figures exceeded expectations by 0.1%, coming in at 2.0% compared to 3.7% previously. On Wednesday, Germany Factory Orders for February improved to -5.7% YoY from -12.0% previously revised down and -10.5% market expectations, while MoM growth came in at 4.8% compared to 0.3% expected and 0.5% previous readings.

 

Wall Street and US Treasury bond yields have both reduced weekly losses as a result of these strategies, but investors remain skeptical.

 

In the context of less liquidity surrounding the March US employment report, sporadic activity on the major markets can keep the EUR/USD inactive and prone to abrupt price swings. Notable is the fact that recent dovish Fed forecasts and disappointing US data generate expectations for a positive surprise and enormous price volatility thereafter.


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