[Foresight] How does “Super Thursday” strike investors to win this key battle?

Investors’ wait-and-see “Super Thursday” is coming, starting with the European Central Bank’s June policy meeting tomorrow night, followed by the public testimony of former US FBI director Komi and the announcement of the UK’s election poll. Investment banks and analysts have long anticipated various market scenarios.

The “super Thursday” that investors are holding back is coming, and the market has long been unable to hold back. Yesterday (June 6), risk aversion broke out, the dollar continued to brush the new low since November 9 last year, the dollar fell 1% against the yen to a six-week low, US stocks opened slightly lower and closed slightly lower; gold rose for three consecutive days Set a seven-month high.

Three major events on Thursday began in the evening of the European Central Bank's June policy meeting, followed by the public testimony of former US Federal Bureau of Investigation (FBI) director James Comey and the announcement of the UK's election poll.

[Three scenarios of ECB policy decisions]

At 19:45 Beijing time, the European Central Bank will announce the interest rate decision; at 20:30, the central bank governor Draghi will hold a press conference. As early as May 29, Draghi made a "pre-announcement" of the meeting when he testified at the European Parliament Economic Committee, saying that he would reassess economic growth and inflation prospects. Finance Network, station ForexCrunch envisaged three scenarios.

Basic scenario: There is no longer a “downstream risk”

Under this scenario, the ECB's assessment of economic and inflation changes is positive, and the ECB is expected to change the wording of “downward risk” to “risk balance” in its policy statement. Since the market has basically digested this expectation, it is expected that the euro will briefly "buy expectations and sell facts" against the US dollar. However, the euro against the dollar is expected to maintain the megatrend of the year after the initial shock.

And as the risk assessment shifts to neutral, the ECB may pave the way for the September meeting to announce its exit from QE. The market expects that the central bank will reduce the size of its bond purchases in early 2018, only with the Fed. Therefore, the fall of the euro against the dollar is a better buying opportunity.

Other scenarios: Draghi is more than expected "pigeon" / "eagle"

In the case of a partial "pigeon", Draghi may repeat the "downside risk" argument, as the market has not digested the expectation, so this move may be extremely negative for the euro. In addition, the European Central Bank may also release additional remarks about reducing QE. In this case, the European Central Bank will not only change the risk from “downward” to “balanced”, and Draghi estimates that it will also talk about possible ways to exit QE. This may lead to a more steep upward trend in the euro.

[The results of the UK election are unpredictable]

Basic conditions and results assumptions of the election

The British general election is to allow the people to vote for the parliamentary representatives. The candidate who won the most votes in the constituency is elected as a member of parliament and will serve as a member of the constituency in the lower house. Including England, Scotland, Wales and Northern Ireland, there are 650 constituencies in the UK, so the election will elect 650 members of the House of Commons. If a party has an absolute majority of members, the party will form the next government, and the party leader will become the prime minister; the leader of the largest opposition party will become the leader of the opposition camp. In the general election, most seats will not change hands. The Labour Party led by the Conservative Party and Jeremy Corbyn, led by Britain’s current Prime Minister, Theresa May, will eventually win. It depends on the voting result of about 100 seats.

At 14:00 Beijing time on Thursday, the polling station will open; at 05:00 on Friday, the export poll will be announced, from which the election can be judged initially (from the perspective of the 2015 general election, the sterling against the US dollar is rapidly expanding); The political party's support rate gap is large, and the results of the election are expected to be announced at 10:00-11:00; if the election is glued, the results will be released later.

Polls show that the gap between the Conservative Party and the Labour Party is narrowing. The Yogov poll showed that the Conservatives are now only about 5% ahead of the survey; Survation's survey shows that the lead has narrowed to 1 percentage point. However, it should be noted that the polls in the 2015 general election were wrong. At that time, many polls indicated that no party could form a government alone, but the result was that the Conservative Party won half of it.

There may be four situations in this election: First, the Conservative Party wins strongly, the Conservative Party under Teresa wins the election with more than 50 seats; the Conservative Party wins the weak majority, but no more than 50 The seat, the power and execution of the prime minister will be weakened; the third is to suspend the government led by the Conservative Party under the parliament, which will further delay the Brexit negotiations; the fourth is to suspend the government led by the Labour Party under the parliament, and the policy uncertainty will be further amplified.

Forecast of market trends

Sterling: Based on the above four scenarios, Barclays analyzed the impact of the pound. Obviously, Barclays believes that no matter how many seats the conservative party gets, the probability of winning the election is as high as 80%. In this case, the pound is expected to strengthen, and the appreciation of the euro will be around 0.6%.

Stock market: Barclays believes that if the Conservative Party wins strongly, it will enhance Teresa May’s leadership and thus reduce the possibility of “unconditional negotiations” for Brexit. And given the low valuation of the UK's domestic stock market relative to economic growth, the Conservative Party's victory will further help the UK's domestic stock market recovery growth. Under this circumstance, the FTSE FTSE 250 index will be stronger than the FTSE100, and its domestic mass retail, housing construction, banking, real estate and tourism and leisure sectors will be significantly stronger.

Barclays believes that in addition to the other three situations in which the Conservative Party wins strongly, it will benefit the FTSE100. At present, FTSE250 has weakened by about 3% compared to FTSE100 in recent weeks, which means investors have begun to digest the election risk. In addition, the relatively weak economic situation, the weaker pound will also support the FTSE100 to obtain positive returns.

[The former FBI director’s hearing was only "thunder thunder and raindrops"? 】

According to a statement from the Senate Intelligence Committee, former FBI Director Komi will hold a public hearing at 10 am Eastern Time (10 pm Beijing time) and a closed meeting with the committee in the afternoon. However, just before the hearing, the US media quoted people familiar with the matter as saying that Komi would not say that Trump had intervened in the FBI’s investigation into the “Tongmen Gate”.

Previously, the news surrounding the "TongRumen" caused the market to shake sharply. In mid-May, the media exposed Trump's leaks and caused a great uproar, and Trump's chance of being impeached suddenly increased by half to 29%. The next day, the global market rushed into safe-haven mode. The US dollar index fell below 98, and the spot gold price rose above $1,260/oz. The “panic index” VIX rose above the 15 mark. On May 18, after Komi said that during the FBI investigation period, "there was never encountered", there was a wave of rebound in risk assets: the Dow rose more than 100 points; the spot gold fell to 1%; the dollar against the yen refreshed Up to 111.74.

This may provide some reference for the hearing on Thursday. However, from the current situation, Trump should be able to breathe a sigh of relief. Former foreign exchange trader Richard Breslow said the final result of the incident may be "thunder and rain," and said investors who are preparing to sell the dollar against the yen need to be carefully considered. In addition, analyst Markos Kaminis pointed out that gold, as a safe-haven asset, may face a “selling fact” market, considering that the market has already digested Trump’s alleged “obstruction of the judicial process”.

(Editor: Fang Fengjiao HF055)

Rubber Bellows and Tubing

Rubber bellows have versatile functions as [dust boots" or seals, used to seal out dust and other light-duty environmental factors while allowing a specific stroke or predetermined range of motion. They are quite common in industrial and automotive applications.

Rubber Bellows are used as a cover or expansion joint to protect device or machines, which are made by rubber compression molding, rubber injection mold or extrusion tool.

Rubber Bellows,Rubber Tubing ,Customized Rubber Bellows,Silicone Rubber Bellows

Xiamen The Answers Trade Co.,Ltd. , https://www.xmanswer.com