Market Review
Focus News
Chinese Market
1. State Administration of Foreign Exchange to Strengthen Forex Market Management
The State Administration of Foreign Exchange stated it would further deepen the development of the forex market, strengthen its management, enhance the resilience of the forex market, actively prevent and mitigate external shock risks, and ensure the stable operation of the forex market. It aims to perfect the "macro-prudential + micro-supervisory" dual management framework of the forex market, improve the legal system of the forex market, strengthen the supervision of forex market trading behavior, carry out forex market transaction behavior evaluation regularly, enhance the self-discipline management of the forex market, and maintain the normal order of the market.
2. Financial Regulatory Authority to Further Relax Market Access for Foreign Institutions
Li Yunze, secretary of the party committee and director of the Financial Regulatory Authority, delivered a keynote speech at the opening of the 2023 Financial Street Forum annual meeting, discussing financial openness, the basic facets of China's economy, and the development trends in China's assets and wealth management industry. Li Yunze stated that efforts will be made to accelerate the improvement of the pre-entry national treatment plus negative list management model, further relax the market access requirements for foreign institutions, continuously enhance transparency, stability, and predictability of financial systems and policies, and strive to create a regulatory environment conducive to prudent operation and fair competition.
3. Securities Regulatory Commission: Registration System Reform Does Not Mean Relaxed Supervision
Yi Huiman, chairman of the Securities Regulatory Commission, stressed maintaining the bottom line against risks, ensuring the stable operation of the capital market, and boosting investor confidence. The reform of the registration system does not imply relaxed supervision but aims to achieve a better combination of an effective market and an active government. The Securities Regulatory Commission will steadfastly maintain the basic framework of the registration system, dynamically assess and optimize arrangements for pricing, share reduction, and refinancing.
4. Shanghai and Shenzhen Stock Exchanges Announce Tighter Refinancing for Listed Companies
Responsible persons from the Shanghai and Shenzhen Stock Exchanges addressed inquiries regarding optimizing the supervision of refinancing arrangements. It was pointed out that strict limits would be placed on refinancing by companies with broken or net worth below the issue price. Refinancing plans of listed companies must not have broken or net worth below the issue price within 20 trading days before the board meeting or the launch of the issuance. Notably, refinancing that aligns with the country's major strategic direction will not be subject to these supervisory arrangements, and financing amounts not exceeding 300 million yuan or 20% of net assets may apply a simplified procedure.
International Market
1. U.S. Calls for a Halt to Israel's Reoccupation
Today, in an interview with U.S. media, Israeli Prime Minister Netanyahu stated that Israel would "indefinitely" take over Gaza post-conflict. The U.S.'s top diplomat provided the most detailed plan yet for Gaza's post-war future from Washington, suggesting the enclave should be managed by the Palestinian Authority and politically reunified with the West Bank. U.S. Secretary of State Antony Blinken reaffirmed the Biden administration's stance that Israel should not reoccupy Gaza post-war, while allowing for its potential role during the "transition period".
2. U.S. 30-Year Mortgage Rate Sees Its Biggest Weekly Drop in Over a Year
Data released on Wednesday by the U.S. Mortgage Bankers Association (MBA) showed that the average rate for a 30-year mortgage in the U.S. experienced its largest drop in over a year last week, with the contract rate falling 25 basis points from 7.86% to 7.61%, the lowest level since late September. This marks the first consecutive weekly decline in mortgage rates since mid-June, moderately easing the strain on the struggling U.S. housing market and driving up home purchase applications significantly since early June.
3. Average Performance in U.S. Ten-Year Treasury Note Auction
The U.S. Treasury Department announced the completion of a $40 billion auction of ten-year Treasury notes, with a winning yield of 4.519%. This yield represents a significant drop of 9.1 basis points from the previous month's auction and remains high since 2007. The bidding situation was below the usual level, with the bid-to-cover ratio dropping from 2.50 to 2.45, the lowest level since June, and below the average of 2.49 from the last six auctions.
4. Russian Oil Exports Nearing Highest Level in Four Months
In the four weeks leading up to November 5, Russia averaged about 3.48 million barrels of oil exports per day, slightly higher than the four-week average leading up to October 29. According to data monitored by foreign media, this marks the highest level of Russian crude oil maritime exports since July. Meanwhile, Russia has promised to extend its 300,000 barrels/day export cut plan to the end of the year, part of its efforts with Saudi Arabia to buoy oil prices. Estimates suggest Russia has only cut a third of this number, implying the remainder must be compensated by reducing exports of refined products like diesel.
Today's Focus
Today, investors should pay attention to China's social financing and M2 money supply, U.S. initial jobless claims, and other economic data. Additionally, significant attention should be directed towards the Israeli-Palestinian situation, speeches by Bank of Japan Governor Kazuo Ueda, Federal Reserve officials Raphael Bostic and Tom Barkin, and other risk events.
