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NOVOX International Financial Information

[Powell said that the way forward is very uncertain, and the development of the epidemic is crucial]
① As the US economy rebounded from its worst contraction in decades, Fed Chairman Powell emphasized the importance of containing the new crown epidemic;
② Powell will testify with the US Treasury Secretary Steven Mnuchin at the House Financial Services Committee on Tuesday. He wrote in the prepared speech: "We have entered an important new stage, and it is earlier than expected. Although we are happy to see a rebound in economic activity, it also presents new challenges-especially the need to control the epidemic. Sex."
③ The Federal Reserve released Powell's speech on Monday afternoon; Powell gave an optimistic view on the recovery of economic activities he saw. He mentioned that corporate recruitment is increasing and spending is increasing, although 20 million Americans are unemployed;
④ He said that the path of economic progress is very uncertain, and it will largely depend on whether we can successfully contain the epidemic. Unless people are confident that they can safely re-engage in a wide range of activities, the economy cannot fully recover;
⑤ Powell also reiterated that he mentioned on some recent occasions, do not withdraw any form of stimulus measures prematurely. He said: "The way forward will also depend on governments at all levels as long as the situation requires, continue to take policy actions to provide relief and support economic recovery."

[U.S. regulatory authorities believe that the new crown epidemic will put pressure on the earnings of the banking industry this year]

 The U.S. Monetary Authority said in a report released on Monday that the U.S. banking industry is facing increasing operations due to the impact of the Covid-19 epidemic. And compliance risk, which is likely to lead to relatively weak financial performance for the rest of the year; OCC stated in its semi-annual risk opinion report that the banking industry is experiencing a coronavirus crisis due to economic shutdowns affecting profitability, credit quality, operations and capital The strong conditions at the beginning of the outbreak were weakened; the agency said that record low interest rates, loan overdue, increased loss provisions, and rising operating costs would pose challenges to profitability.

[U.S. regulators believe that the new crown epidemic will put pressure on the profitability of the banking industry this year] 

Kudlow, US national economic adviser: The economic outlook looks pretty good, but there are uncertainties. When considering further new crown assistance measures, the government hopes to give Subsidies for Americans returning to work and a V-shaped economic recovery still look good.

[U.S. regulatory authorities believe that the new crown epidemic will put pressure on the earnings of the banking industry this year] Powell said that the way forward is very uncertain, and the development of the epidemic is crucial; as the US economy rebounds from the worst contraction in decades, Fed Chairman Powell emphasized The importance of curbing the new crown epidemic; Powell will testify with US Treasury Secretary Steven Mnuchin at the House Financial Services Committee on Tuesday. He wrote in the prepared speech: "We have entered an important new stage, and it is earlier than expected. Although we are happy to see a rebound in economic activity, it also presents new challenges-especially the need to control the epidemic. Sex."

[Canada’s new crown epidemic model shows an increase in the proportion of young people infected]
Canada’s Federal Chief Medical Officer Tan Yongshi’s new crown epidemic model released on the 29th shows that Canada’s increasing number of new coronavirus infections, hospital admissions and the proportion of critically ill patients are steadily declining. Starting in late May, new cases have steadily declined in almost all age groups, except for the proportion of young people between the ages of 20 and 39. Tan Yongshi said that from a statistical point of view, the latest new cases mainly come from social activities, such as family gatherings, funerals, etc. From the perspective of regional distribution, the current epidemic is mainly concentrated in certain "hot spots" in Ontario and Quebec (CCTV News)

[The resurgence of the epidemic stimulates the demand for risk aversion, and the gold ETF assets recorded the largest increase since 2009]
Since the world went out of the financial crisis, gold-backed ETFs have never seen demand surge like this quarter. Since the beginning of April, the assets of gold ETFs have jumped by more than 12 million ounces, marking the largest quarterly increase since the first quarter of 2009. As the new surge in new crown cases fueled demand for risk aversion, investors pushed positions to record highs, helping gold prices rise to seven-year highs

[EU is expected to approve the extension of the travel ban on US residents on Tuesday]
According to foreign media reports, according to a draft decision that will be formally adopted on Tuesday, the EU government is prepared to extend the travel ban on US residents for at least two weeks. The wording of the draft implies that until the US authorities control the spread of the epidemic, the ban on business and leisure travel for US residents will not be lifted. It is reported that the decision has been put to a vote and requires the support of the vast majority of EU member states to take effect from Wednesday. The so-called written approval process will end at noon on Tuesday, Brussels time

[Japan has more than 100 new crown cases for two consecutive days]
① The number of newly diagnosed new crowns in Japan has rebounded recently. According to statistics from the Japan Broadcasting Association (NHK) TV station, as of 21:05 on the 29th (20:05 on the 29th, Beijing time), 110 new cases were diagnosed in Japan that day, more than 100 cases on the second day, and a total of 18631 cases were diagnosed;
② The Chief Cabinet Secretary of the Japanese Cabinet Sugai Suga told a regular press conference on the 29th that it is not yet time for the state of emergency to be released again, and the public will not be required to self-regulate cross-country activities. In response to more than 10 million confirmed cases worldwide, Suga said that in order to prevent the imported epidemic, it will continue to implement the immigration prevention and control measures

[German Bundestag reportedly widely supports the ECB’s bond purchase plan]
① Two informed officials said that a broad coalition of German and German parties in the German parliament had agreed to a draft motion to support the ECB's bond purchase plan. This may end the deadlock caused by the ruling of the country’s Constitutional Court last month;
② Officials said that at a party representative meeting on Monday, Prime Minister Merkel’s alliance partners, as well as the Green Party and the Liberal Democratic Party, agreed in principle to accept the ECB’s explanation of its so-called Public Sector Purchase Plan (PSPP). Finance Minister Schultz received the European Central Bank document supporting the case from the Bundesbank earlier and forwarded it to Wolfgang Schaeuble, the speaker of the Bundestag;
③ People familiar with the matter said that the draft motion will still have to be accepted by the core meeting of the party, and the parliament will have the final decision later this week. However, given that Merkel’s senior CDU officials support this plan, and the Social Democratic Party and the Green Party have long been supporters of the European Central Bank’s monetary policy, there is a high probability of broad approval;
④ Parliament approval will meet the requirements of the German Constitutional Court, that is, the German Bundestag needs to review whether the European Central Bank’s bond purchase plan is “proportional”; the German Supreme Court ruled in May that the 2.2 trillion euros (2.5 trillion US dollars) PSPP may be illegal The judges ruled that if the plan did not show “proportionality” to the risk within three months, the largest buyer, the Bundesbank, would have to withdraw; the judges said that the German parliament should challenge the European Central Bank to show that it had Considered adverse side effects

【Russian crude oil production approaches OPEC+ target for the second consecutive month】
① According to Bloomberg calculations, on June 1-28, Russia's daily crude oil production was 8.52 million barrels per day; after the production reduction compliance rate reached 96% in May, Russia increased its production cuts in June. This month's crude oil production Closer to OPEC+ production target;
② In this historic agreement, OPEC+ requires all member states to fully fulfill their production reduction commitments. Russia, which was a laggard in the previous production cuts, has significantly reduced oil production this time and played an important role in supporting the oil market. OPEC+ member states' full compliance with the output agreement is crucial to extending the record-breaking action by one month;
③ According to the data from the CDU-TEK department of the Russian Ministry of Energy that Bloomberg saw, as of last Sunday, Rosneft had mined a total of 35.62 million tons of crude oil and condensate this month. According to the conversion rate of 7.33 barrels per ton, it is equivalent to an average of 9.324 million barrels per day;
④ According to the OPEC+ agreement reached in April, Russia promised to only reduce crude oil production, and condensate is not restricted. Although the country does not provide a breakdown between the two, if Russia produces condensate at the same level as in May (according to Bloomberg calculations, the daily output is about 800,000 barrels), then this month the country’s crude oil daily Production will reach 8.542 million barrels, and Russia’s daily production target for May, June and July is 8.5 million barrels;
⑤ When the latest OPEC+ production agreement in May began, Russia for the first time immediately reached the standard and reported that the compliance rate was 96% last month. The country’s energy minister Novak said in an interview on June 17 that he was determined to continue full-scale in June Fulfill the production agreement



News and Data




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Summary of Institutional Perspectives
Bank of America's Ciana: The moving average of the US dollar vaguely shows "death cross";

NOVOX International Financial Information

① Paul Ciana, chief technology strategist at Bank of America, said that the weakness of the US dollar over the past few months seems to be forming a technical signal that has predicted some of the worst bear markets in the past century;
② Ciana wrote in a report on June 26 that the decline in the US dollar spot index in May and June made the "death cross" looming in the next few weeks; when the short-term moving average closed below the long-term moving average , This signal will appear;
③ The US dollar index has fallen more than 5% from the peak this year, which was reached in March, and reported to around 97.506 on Monday; the 50-day moving average is at 98.592, which is close to the 200-day moving average of 98.370;
④ Ciana's analysis studied 26 such signals since 1980. Among them, the 200-day moving average of the US dollar index fell nine times as before, and the dollar fell 50 days after the crossover occurred;
⑤ He wrote that if the price trend closed below 96.75 in the next few days, it will form a bearish flag, suggesting that the US dollar index will fall further in July. Once the price rises above the resistance area of 98.40-98.75, then either a bullish breakthrough is under way Proceed, or the summer range fluctuates;
⑥ "Death Cross" has proved to be a reliable predictor of some of the worst bear markets in the past century, including 1929, 1938, 1974 and 2008.

JPMorgan Chase: The dollar may face a 30% depreciation in the next ten years;

NOVOX International Financial Information

① Analysts at JP Morgan Chase pointed out that in the next 10 years, the US dollar index may once again enter a long-term depreciation cycle, or, as in the 1960s and 1970s, a considerable basket of currencies in developed economies lost about 30% of their purchasing power in 10 years;
② JPMorgan Chase believes that the Fed’s current round of easing policy will be maintained for a considerable period of time, so a large increase in US dollar cash supply will constitute a continuous negative exchange rate; at the same time, the further expansion of the fiscal deficit hole created by the US federal government’s bailout policy is bound to At the cost of overdrafting future dollar purchasing power reputation;
③ Under the two-pronged approach, the long-term exchange rate of the US dollar is bound to decline, which may also add to the prospect of erosion of the low US dollar reserve currency caused by political risks. Therefore, the US dollar index fell below 70 in 2030, and at present it is still a fairly conservative estimate.

Deutsche Bank: Investment portfolios flowing into Japan may boost the yen;

NOVOX International Financial Information

① Tim Baker of Deutsche Bank believes that, given that global returns have converged to zero in the era of the New Crown Epidemic and Japanese stocks are still relatively cheap, the inflow of investment portfolios to Japan will boost the yen;
② Baker, the head of macro research, wrote in a research report on June 25 that equity capital inflows to Japan may increase, which means stronger net portfolio inflows and support for the yen. Why would it increase? Japan’s stock prices are cheap, and the market has changed dramatically: increased repurchases, higher profit margins, and lower earnings volatility;
③ The current “expected price-earnings ratio of Japanese stocks is the same as the lowest level in the developed markets of the United Kingdom and not much higher than emerging markets”; the changing Japanese corporate environment has increased their attractiveness, “margins have risen to levels close to global peers”, and “ Japan’s profitability is not as poor as in the past recession period”;
④ According to the report, the stock repurchase volume of Japanese companies has tripled in the past six years; the US dollar against the yen rose to its highest level since June 9 on Monday, touching 107.88.

Mitsubishi UFJ: The Canadian dollar is expected to rise against the US dollar, but it may underperform other G10 currencies;

NOVOX International Financial Information

① Last week, Fitch will lower Canada’s sovereign credit rating from AAA to AA. Mitsubishi Tokyo UFJ Bank expects the Canadian dollar to rise against the US dollar, but its performance will be weaker than other G10 currencies. Like other downgrades of Fitch, the fiscal deficit in Canada has never been greater. At the time of the blowout, the downgrade has limited impact on the performance of the Canadian dollar. It seems that it is difficult to sell the Canadian dollar, which makes the Canadian economy particularly vulnerable. However, the downgrade of the Canadian rating does help to highlight a differentiating factor, which may mean that after the new crown epidemic in the future The form of economic rebound that will appear will be more bland;
② The performance of the Canadian dollar is also likely to be affected by the scale of stimulus implemented by the Bank of Canada. Due to the large amount of asset purchases taken by the Bank of Canada to repurchase operations, the balance sheet assets have soared from CAD 120 billion to CAD 500 billion, an increase of more than four times The GDP accounted for about 17%, and correlation analysis shows that the Canadian dollar is currently more affected by stock market performance than by oil price fluctuations, so overall risk sentiment will be important, but the direction of crude oil prices is still important;

③ Our oil analysts in Dubai have a constructive view on mid-term oil, but the rise in oil prices so far may mean a short-term pullback, because despite the rise in crude oil demand, there is still a large inventory backlog that needs to be consumed; There are obvious risks in the United States, so it is necessary to pay attention to the increase in the risk of the new crown epidemic in the United States as a risk factor for the Canadian dollar. It is worth noting that the US dollar may strengthen in the short term, or the Canadian dollar will fall further.

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