The "surprise" of the presidential election triggered a stock market crash.
On the evening of October 23rd Beijing time, the Argentine stock market suddenly collapsed, with a decline of 12.44% as of the close. On the news, there was a very "unexpected" result in the Argentine presidential election: current Argentine Economy Minister Sergio Massa, who was not favored before the election, unexpectedly became the leading candidate.
The current "US debt crisis" seems to be intensifying. During the European trading session on October 23, the yield of the US 10-year treasury bond bond once rose to 5.00%, the highest since 2007. At the same time, a "black swan" is approaching the US treasury bond market. The market expects the Bank of Japan will withdraw from the negative interest rate policy, and the US treasury bond may be "doomed". According to the data of the US Treasury Department, by the end of August, Japanese investors had held US $1.1 trillion (about 8 trillion yuan) of treasury bond.
In addition, the latest actions of global pharmaceutical giants have also received attention. On October 23rd local time, Swiss pharmaceutical giant Roche announced that it would invest 7.1 billion US dollars (approximately over 50 billion RMB) to acquire Telavant Holdings, Inc. After the acquisition is completed, Roche will receive Televant's drug "RVT-3101", betting on the inflammatory bowel disease track.
Late night crash
On the evening of October 23rd Beijing time, the Argentine stock market suddenly experienced a crash after opening. The MERV index, the benchmark stock index of Argentina, plummeted by 9.5% at the beginning of the trading session, and as of the close, it had fallen by 12.44%.
On that day, the black market exchange rate of the Argentine peso rose by over 14% to 1050.
On the news, there was a very "unexpected" result in the Argentine presidential election: current Argentine Economy Minister Sergio Massa, who was not favored before the election, unexpectedly became the leading candidate. After the majority of the votes were counted, the Argentine election authorities stated that Massa will enter the presidential runoff with right-wing candidate Javier Mile.
According to Argentine election regulations, if any candidate obtains a vote rate of over 45% in the general election, or a vote rate of over 40% and is 10 percentage points higher than the second place, the candidate will automatically be elected as the President of Argentina.
As of 14:00 Beijing time on October 23, over 98% of the votes in the first round of voting have been counted, and Massa received over 36.6% of the votes, ranking first; The only candidate of the far-right electoral coalition, the Free Progressive Party, and Congressman Javier Mille, received about 30% of the vote, ranking second.
Both are below the threshold of a complete victory, which means they will have a second round of runoff on November 19th. Argentina's current general election will elect a new president and vice president, as well as 43 members of the Southern Common Market Parliament, 130 members of parliament, and 24 members of parliament. The elected president will officially take office on December 10th of this year for a four-year term.
Analysts pointed out that this unexpected result not only caught the market off guard, but also fully reflected the complex situation of the Argentine economy.
Mart í n Rapetti, Executive Director of Equilibria, an economic consulting firm, said that the market is uneasy about Mile's economic reform plan, but the strong performance of the Peronist Massa may also further worsen Argentina's economic situation. La Petti said, "Massa's governance capabilities are much better than Mile's, but the market doubts whether Massa really wants or has the ability to carry out the reforms that Argentina needs
At the time of the October general election, Argentina is experiencing extremely severe inflation. According to previous reports by CCTV News, Argentina's cumulative inflation rate over the past 12 months has reached 138.3% from September last year to September this year. The continuous depreciation of the currency peso, a triple digit inflation rate, negative central bank reserves, and the heavy impact of drought on agriculture, as a pillar industry, have caused the country to face economic recession.
The Bank of Japan is about to launch an air strike
During the European trading session on October 23, the yield of the US 10-year treasury bond bond, known as the "anchor of global asset pricing", once rose to 5.00%, the highest since 2007, and the yield has risen more than 40 basis points this month.
US treasury bond bonds were once known as "the safest asset in the world", but yield shocks occur almost every day. Just last week, the fluctuation range of the 10-year US Treasury yield reached a rare 40 basis points. In addition, according to data compiled by the industry, the volatility of long-term bond yields has reached its highest level in at least 18 years.
At the same time, as the market is increasingly worried that a new round of Palestinian Israeli conflict may spread to the entire Middle East region, or even the United States, this has also exacerbated the volatility of the US treasury bond bond market.
It is worth noting that a "black swan" is also approaching the US treasury bond bond market.
Currently, the market generally expects that the Bank of Japan will withdraw from implementing a negative interest rate policy that has lasted for nearly eight years. Once the Bank of Japan ends negative interest rates, the global bond market, especially the medium - and long-term treasury bond of developed countries, may be "doomed".
Japan's policy interest rate
With the rise of domestic interest rates in Japan, a large number of Japanese investors will "abandon" US and European treasury bond bonds and turn to Japanese bonds.
It is worth noting that Japanese investors are the largest foreign holders of US treasury bond bonds. According to the data of the US Treasury Department, by the end of August this year, Japanese investors had held US treasury bond bonds of 1.1 trillion US dollars (about 8 trillion yuan).
In addition, according to the data of Japan's Ministry of Finance, Japanese insurance companies dropped a total of 196 billion yen of foreign bonds from April to September this year, and a record 8 trillion yen in the previous six months.
Eugene Leow, an interest rate strategist of DBS Bank, said that Japan may need to make some form of monetary policy normalization, which means that it will exert upward pressure on the yield of 5-10 year treasury bond bonds of many developed countries.
According to the schedule, the Bank of Japan will hold two more interest rate meetings within 2023, with resolutions announced on October 31 and December 19 respectively.
According to the overnight index swap curve in Japan, current market pricing shows a 20% probability that the Bank of Japan will end its negative interest rate policy within the year. By the end of April next year, this probability has risen to 100%. This means that raising interest rates by the Bank of Japan is almost a "nail in the coffin" thing.
Analysts point out that the Bank of Japan is expected to withdraw from its negative interest rate policy as early as January 2024, and then proceed with a 25 basis point rate hike every six months, with a neutral interest rate around 2%.
In addition, according to the latest report of Japanese media, officials of the Bank of Japan are considering whether to adjust the control policy for the yield of 10-year treasury bond bonds.
The giant ramped up 50 billion yuan
On October 23rd local time, Swiss pharmaceutical giant Roche announced that it would invest $7.1 billion (approximately over 50 billion yuan) to acquire Telavant Holdings, Inc.
Roche stated that it will obtain the right to develop, manufacture, and commercialize Televant's drug "RVT-3101" in the United States and Japan. In addition, Roche can choose whether to collaborate globally with Pfizer on the next generation of p40/TL1A targeted bispecific antibodies.
It is reported that Roche's proposed acquisition of RVT-3101 drug was initially developed by Pfizer. In 2022, Pfizer and multinational biopharmaceutical company Roivant Sciences Ltd. jointly founded Telavant and took over the business of RVT-3101.
According to the report, RVT-3101 is a fully human monoclonal antibody targeting ligand 1A (TL1A), which is used for inflammatory bowel disease (IBD) and other purposes by inhibiting TL1A targeting inflammation and fibrosis pathways.
Inflammatory bowel disease, also known as "green cancer", mainly includes ulcerative colitis and Crohn's disease. Common symptoms include severe abdominal pain, diarrhea, malnutrition, etc., and patients are often very thin and weak.
At present, there is no cure for inflammatory bowel disease and it is a lifelong disease. It is understood that the late Japanese Prime Minister Shinzo Abe resigned from his position due to repeated episodes of ulcerative colitis that prevented him from working properly.
Roche wrote in a press release that nearly 8 million people worldwide have been diagnosed with inflammatory bowel disease, mainly concentrated in Europe and the United States, with 80% of them not receiving lasting relief. According to relevant data, it is speculated that the number of patients with inflammatory bowel disease in China will reach 1.5 million by 2025.
The data released in June this year showed that RVT-3101 achieved positive long-term results in the second phase clinical trial of treating patients with ulcerative colitis, demonstrating its potential to become the "best in class". In the experiment, the CR (clinical remission rate) of the subjects reached 36%, and they also performed well in terms of safety and tolerance.
Since the beginning of this year, multiple pharmaceutical giants have increased their layout on the track of inflammatory bowel disease, and in addition to Roche, MSD and Lilly have also taken action.