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Market News Summary of Institutions' Views on Financial Markets on November 19

Summary of Institutions' Views on Financial Markets on November 19

On November 19, the institution summarized its views on the stock market, foreign exchange and the policy outlook of central banks.

2021-11-19
9419
On November 19, a summary of the institutions' views on the outlook for the stock market, foreign exchange, and central bank policies:



1. Morgan Stanley: The Canadian dollar will rise in 2022

① Morgan Stanley stated in a report on the outlook for 2022 that the Canadian dollar is the best-performing currency in the U.S. dollar area because of the strong performance of the Bank of Canada, strong commodity and risk prices and other factors;
②The bank predicts that the US dollar against the Canadian dollar will fall from the current 1.26 to 1.23 at the end of the year, but it is expected to remain above 1.23 in the first quarter of 2022;
③The Morgan Stanley team believes that it may be difficult for the U.S. dollar to fall against the Canadian dollar at the beginning, because the Bank of Canada will avoid raising interest rates in January 2022, but a rapid rate hike later will cause the exchange rate to fall to 1.12 by the end of 2022.

2. Barclays latest estimate: the euro against the dollar is expected to recover in 2022

① Barclays’ latest forecast indicates that the euro against the dollar may rebound to 1.15 before the end of the year, and then further gradually recover throughout 2022;
② Eimear Daly, a strategist at Barclays, said that although the real interest rate gap between the EU and the United States has deviated from market expectations, this deviation is short-lived. The correction of the euro against the US dollar is in line with the real interest rate expectations. It is expected that this will continue to become the euro. The main driving force against the U.S. dollar

3. Morgan Stanley: Be prepared for a correction in European stock markets and buy it

①Graham Secker, chief European equity strategist at Morgan Stanley, said that European stock market investors will experience ups and downs next year;
②He said: “Although the market should generally go higher, a double-digit plunge in 2022 is very likely. The stock market has been rising for 18 consecutive months without any meaningful correction. He believes that this situation will not happen again. Lasts 12 months

4. JPMorgan Chase raises the target position of the S&P 500 Index: it will reach 5000 points in the first half of 2022

① JPMorgan Chase released a report this week that as global supply chain problems gradually improve, by the first half of 2022, the Standard & Poor's 500 index will rise by 6% to 5,000 points;
②With the better performance of corporate earnings season and the weakening of market concerns about inflation, JPMorgan Chase is still bullish on the stock market;
③JPMorgan Chase pointed out that as global supply chain pressures and labor shortages ease, companies will continue to achieve revenue growth and record profit margins, which will help push up the broader market index

5. Capital Investment Macro: The Fed's policy stance in the next few years is expected to depress gold prices

① Kieran Tompkins, assistant economist at Capital Economics, said: “Although we predict that high inflation in the US will be longer than market expectations, this ultimately means that investors demand higher inflation compensation. , But we also believe that the Federal Reserve’s stance of moderate monetary policy tightening will raise the real yields of U.S. Treasury bonds. This should be enough to cause the price of gold to fall in the next few years."
②Capital Capital expects that the Federal Reserve will begin to tighten monetary policy next year, and the average inflation rate in the United States will reach 3% in 2022 and 2023, which will put pressure on gold;
③ Tompkins added: "We do believe that monetary policy will be moderately tightened, leading to a slight increase in the real yield of U.S. Treasury bonds." Previously, Capital Investment Macros had predicted that the price of gold would reach US$1,750 per ounce by the end of this year.

6. JP Morgan Chase economists have changed their expectations, and the latest is expected that the Fed will raise interest rates in September next year

① JP Morgan Chase economists said that they now expect the Fed to raise interest rates in September next year, becoming another Wall Street bank that has given up expectations that the Fed will maintain interest rates unchanged in 2022. In a new outlook report released to clients on Wednesday evening, an American economist at JP Morgan Chase led by Michael Feroli said that by the middle of next year, the Fed’s full employment goal will be achieved;
② Economists said that this will prompt the Federal Reserve’s Open Market Committee, which sets policies, to raise the benchmark interest rate from close to zero in September, then further raise interest rates in December, and raise interest rates every quarter thereafter. They expect that once inflation-adjusted interest rates return to zero, interest rate hikes will stop. Feroli and colleagues said that when the facts change, the FOMC will change its mind;
③The views of economists still sound more dovish than investors. Goldman Sachs economists said last month that they expect the Fed to raise interest rates in July. Economists at Morgan Stanley still believe that the Fed will not adjust interest rates for the whole of next year. JP Morgan’s economists also said that they believe Powell will still be reappointed by President Biden as the next Fed chairman

7. HSBC: Although the inflation rate is expected to hit a record, the European Central Bank is expected to stick to its easing stance

HSBC research shows that even if the inflation rate hits a record, it will not prevent the European Central Bank from continuing to maintain its ultra-loose stance. Senior economist Fabio Balboni and others expect the euro zone inflation rate to hit a historic high of 4.5% this month, while the central bank is preparing to make plans for the stimulus plan. If inflation is high in November, European Central Bank President Lagarde may not be able to insist on the view that inflation is temporary. The European Central Bank is not expected to take the current surge in inflation at heart, and will announce further support for 2022 in December. Quantitative Easing

8. Goldman Sachs expects that the impact of Brexit will force the Bank of England to take the lead in raising interest rates by other central banks

① Goldman Sachs Asset Management stated that the labor shortage caused by Brexit may mean that the Bank of England will raise interest rates earlier than other major central banks. The agency is shorting British government bonds and expects the Bank of England to raise interest rates next month, and raise interest rates two more times before June 2022. The agency also shorted the pound sterling because trade between the UK and the EU may be further disrupted;
②Hugh Briscoe, global fixed income portfolio manager of Goldman Sachs Asset Management, said that the impact of Brexit is mainly reflected in the supply of labor. Although it is a global problem, the UK is facing a particularly serious labor shortage as it emerges from the epidemic. Even in a market where we think we are digesting excessive currency tightening in the next year, we remain cautious about increasing our exposure, because as we approach the interest rate hike cycle, the room for increased volatility is enlarged.

9. ASB Bank of New Zealand: Inflation survey focused on the policy tightening of the Federal Reserve Bank of New Zealand, expected to raise interest rates by 50 basis points

① The market is holding a wait-and-see attitude on how many basis points the Reserve Bank of New Zealand will raise interest rates next week, after the bank’s regular surveys showed that inflation expectations have jumped;
② ASB Bank of New Zealand stated that the interest rate market has digested the expectation of the Bank of New Zealand to raise interest rates by 36 basis points on November 24, which means that the bank is very likely to raise interest rates by 50 basis points to 1.0%, rather than market economists expected. 25 basis points;
③ ASB said that financial conditions have tightened significantly due to rising mortgage interest rates, and the Reserve Bank of New Zealand hopes that this situation will continue. The Reserve Bank of New Zealand is expected to issue a tough statement, raising its expected peak cash rate from 2.14% in its August statement to 2.5%

10. BK Asset Management: If the U.S. economic data cools down later, the U.S. dollar is likely to see a correction

①Boris Schlossberg, managing director of foreign exchange strategy at BK Asset Management, said that the U.S. dollar has risen across the board, and now the market will take a step back and assess whether the inflation theme really continues at the rate everyone believes. If this is true, then nothing can stop it. ;
②But he believes that if the data starts to cool down a bit later, you will definitely see a full correction of the dollar

11. Goldman Sachs: The release of US oil reserves will bring upside risks to oil price forecasts in 2022

①Damien Courvalin, a commodity strategist at Goldman Sachs, said that although the release of crude oil reserves in the United States will provide a short-term solution to the structural deficit, after the oil price has fallen by $6 per barrel in recent weeks, the market is now pricing in more than that after the release of crude oil reserves in the United States. 100 million barrels of crude oil will enter the OECD inventory;
②The worst thing is that this will not help the slow response of global supply, and only high oil prices can overcome this situation. If it is confirmed that the United States will release crude oil, but the oil trading volume remains low and oil prices remain low before the end of the year, this will bring obvious upside risks to the oil price forecast in 2022.

12. Goldman Sachs: The expectation of the release of the US Strategic Petroleum Reserve has been fully digested by the market
Goldman Sachs analysts stated in their latest customer report that the release of the US Strategic Petroleum Reserve (SPR) has been fully reflected in market pricing. This (release of reserves) does not help the slow response of the global supply chain, and only high oil prices can overcome this problem. If the news of the release of stocks is confirmed and attempts to depress oil prices, oil prices may still continue to rise. This will bring obvious upside risks to our forecast
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