A summary of institutions' views on financial markets on May 20

On May 20, institutions summarized their views on the stock market, commodities, foreign exchange and central bank policy prospects.



1. CICC: Coal prices may be driven by three factors in the short term;
CICC said that in the short term, we believe that coal prices may be driven by three factors: 1) The peak period of coal consumption in summer is coming, and demand may strengthen; 2) The epidemic is gradually lifted and steady growth is gradually exerting force, and demand is expected to recover; 3) The export of upstream raw materials is expected to boost and support demand. In the medium and long term, we believe that the restructuring of the global energy supply and demand pattern caused by geopolitical conflicts will not only lead to high coal prices in the short term, but may also increase the cost of global coal use in the medium and long term, causing the center of coal prices to move upward in the medium and long term.

2. Agrianalytics: World grain reserves drop to lowest since 2008;
According to agricultural analytics firm Gro Intelligence, global wheat reserves are only enough for 10 weeks, the lowest level since the 2008 financial crisis. While governments consider global wheat stocks to account for 33 percent of annual consumption, Gro Intelligence Chief Executive Sara Menker told a UN Security Council meeting on food security on Thursday that the figure was actually closer to 20 percent. Menker believes urgent action is needed to tackle the growing threat of hunger. Soaring crop prices put millions at risk, while drought and soaring fertilizer prices threaten to further reduce food supplies. "This is not a cyclical event that could dramatically reshape the geopolitical era."

3. ING: Australia's interest rate hike is expected to help boost the Australian dollar;
Rob Carnell, head of Asia-Pacific research and chief economist at ING: Australia's good labor data helped bring a 50bps rate hike into sight, which could help boost the Aussie, but it's unclear if it will last. After today, the Aussie is still driven by global factors such as falling US stocks, aggressive monetary tightening by the Federal Reserve, rising recession fears

4. Oanda: Worries about a sharp drop in "short-term crude oil demand" are overdone;
Ed Moya, senior market analyst at Oanda: Oil markets remain volatile as concerns over demand destruction for crude grow. Despite recession fears, oil markets remain tight, fears of a sharp drop in 'short-term crude demand' overblown

5. Fitch said that Russia's breathless impact on the euro zone economy;
① Fitch said that for the euro area, the impact of the immediate reduction in Russian gas supply is almost impossible to completely wipe out in the short term;
②If Russian gas supplies suddenly stop, the euro zone may fall into recession

6. Steven Barrow, Standard Bank FX Strategist: While the environment is generally safe-haven and favorable for the dollar, there may still be some level of vulnerability compared to safer currencies such as the Japanese yen and Swiss franc. If you're bearish on the stock market, U.S. markets may look the most suspenseful

7. Degussa: Gold and silver are relatively cheap;
Thorsten Polleit, chief analyst at Degussa: As long as financial markets have reason to believe that central banks can strike an acceptable balance between raising interest rates to curb inflation and preventing the financial and economic system from falling off a cliff, gold and silver prices may not rise significantly for now;
Both gold and silver are relatively cheap as investors ignore the risk that a Fed rate hike will push the U.S. economy into recession, Degussa chief economist Thorsten Polleit said in the latest market commentary.

8. Edward Moya, senior analyst at OANDA: The dollar is falling, making it cheaper for overseas buyers to buy gold, which is good news for gold

9. Goldman Sachs and JPMorgan strategists think recession fears are overblown;
Some of Wall Street's top strategists say the gloomy outlook for the U.S. economy and stocks may have been overdone. Goldman Sachs Group Inc.'s David J. Kostin and JPMorgan Chase & Co.'s Marko Kolanovic both believe investors' fears of an impending U.S. recession are overblown -- leaving room for stocks to rally this year. The S&P 500 has fallen 18% from a record high in January, approaching a bear market;
Goldman Sachs strategists led by Kostin wrote in a May 18 report: "Recession is not inevitable, and sector rotation within the U.S. stock market suggests that investors are pricing in a high probability of an economic downturn beyond the recent strength of the economy. The level indicated by the data. The relative performance of cyclicals and defensives points to a "sharp slowdown in growth", but ISM manufacturing data does not support this;
U.S. stocks have fallen sharply this year as high inflation and signs of a hawkish Federal Reserve have heightened the prospect of an economic downturn. Fears of stagflation rose to the highest level since 2008, according to Bank of America's latest fund manager survey, prompting investors to hoard cash and underweight stocks

10. Bank of America: As the influence of the euro against the G10 foreign exchange market declines, the impact of the Federal Reserve on the exchange rate of G10 currencies will become increasingly apparent

11. Sam Zief, global head of foreign exchange strategy at JPMorgan Private Bank: For the euro to reach parity against the dollar, growth forecasts for the euro area relative to the U.S. need to be revised down, similar to what happened after the Ukrainian invasion