On Tuesday (October 11) Asian session, spot gold fluctuated narrowly in , and is currently trading around $1,668/ounce, not far from the weekly low of 1665.56 set overnight. On Monday, Fed Vice Chairman Braillard and Chicago Fed Chairman Evans continued to deliver hawkish speeches, reiterating their determination to further raise rates in , and said that the economy has a chance to achieve a soft landing, helping US dollar index record four consecutive positives, suppressing gold prices; and British Chancellor Quatten announced the announcement of the budget in advance, and the UK bond yield rose sharply, which also led to the rise of US bond yields, and gold prices were further suppressed.
However, Russia's retaliatory air strike against Ukraine, the president of the World Bank and the chairman of IMF warned that the global recession risk was rising, and some safe-haven buying still supported the gold price. David Meger, head of metal trading at
HighRidgeFutures, said rising interest rates and a stronger dollar are continuing to put pressure on gold and overshadow any safe-haven demand arising from the latest escalation of the Ukrainian crisis.
independent analyst Ross Norman said, "We are back to the level of $1,680 again... Gold will still face some downward pressure in the short term." From the technical perspective of
, the short-term downward risk of gold prices has increased, but the variables are relatively large. Pay attention to the breakthrough situation in the 1660-1690 region.
The economic data on this trading day is relatively small. We will continue to pay attention to the news related to the geopolitical situation in Russia and Ukraine. The speeches of Cleveland Fed Chairman Mester, the speeches of European Central Bank officials and Bank of England officials also need to be paid attention to.
fundamental negative fundamentals
[Federal Vice Chairman Brainard says interest rates will remain restrictive, but pay attention to data monitoring risks]
Fed Vice Chairman Brainard said on Monday that the Fed is very clear that restrictive monetary policy needs to be adopted to reduce inflation, but the path and pace of interest rate hikes will still "depend on data". The Fed is monitoring the evolution of economic and domestic and global risks.
Brainard said in his prepared speech and Q&A session that the Fed's interest rate hikes so far have begun to slow the economy - perhaps more than expected - and that the full impact of tightening policies will not be felt in the coming months.
She also said that the central bank abroad "at the same time" raises interest rates to fight local high inflation, which has caused the impact of "1+1 is greater than 2" and constitutes a potential risk that U.S. officials need to monitor.
"One thing is clear, that monetary policy will be restrictive for some time until there is confidence that inflation will fall... (Federal Open Market) Committee has stated that policy rates will be further raised," she said. "But we will also learn as we do, and the assessment will reflect future data and domestic and global risks... The actual policy path will depend on the data." She said policymakers' predictions of interest rate paths are "very helpful at some point in time", but also based on expectations of how the economy will evolve. The latest forecast released in September shows that decision makers predict the median is that the federal funds rate will rise to around 4.6% next year.
She said, "Things may change." Brainard did not feel that the Fed's determination to fight inflation was weakening, nor did he feel that the Fed would not continue to raise interest rates as planned, including a possible 75 basis points rate hike at the meeting on November 1-2. Currently, U.S. inflation is triple the Fed's 2% target.
She reiterated at the National Association of Business and Economics (NABE) that it is risky for the Fed to "prematurely" abandon tightening policies, and that inflation declines "take some time".
[Federal Evans: Policymakers basically agree on the path of interest rate hikes, and there is still a chance to achieve a soft landing]
Chicago Fed Chairman Evans said on Monday that has a strong consensus within the Fed, that is, to raise the target policy interest rate to around 4.5% by March, and to keep interest rates at that level as the Fed evaluates its impact on inflation and provides time for recovery for supply chains. The upcoming data released by
will have to fundamentally "shake" current forecasts in order to push the Fed to change this plan.Evans said the plan will put the Fed's policy at a historically able to control prices after adjusting to expected inflation.
Evans said that at present, the Fed's view on appropriate policies will "not be much different." "The federal funds rate will reach around 4.5% in March... Regardless of the data, we will implement a lot of restrictions unless a lot of things really happens in the next two months. We don't have enough time."
Now people are increasingly worried that the pace of the Federal Reserve's rate hike may put pressure on the global economy and exceed the Fed's ability to assess the impact on the real economy.
Evans said at a meeting of the National Association of Business Economics (NABE) that the interest rate level currently set for next year is to balance the need to curb demand through rising market interest rates, while giving supply chains an opportunity to further heal and avoiding a sharp rise in unemployment. "I think we can lower inflation relatively quickly while avoiding recession,"
Evans said. He mentioned that there are “unusual behaviors” in the economy, which should allow the Fed to “reduce inflation without significantly increasing the unemployment rate, provided we take a reasonable restrictive policy path with caution and wisely.”
Evans acknowledged that markets have fluctuated recently and said he might “sound quite optimistic”, but he believes that “labor market pressure has a greater impact on inflation than usual because of “unusual interactions” between the job market and the supply chain.”
Evans said that because higher interest rates suppress demand and reduce the “heat” in the labor market, the same dynamic should drive inflation down “without having to create too much idleness in the economy”, such as a sharp rise in unemployment. It will be "a pretty nice soft landing."
[Kuateng tried to appease investors, but the UK Treasury sell-off accelerated again]
British Chancellor Kuateng tried to appease investors on Monday, announcing that the budget would be announced in advance and appoint a Treasury insider to manage the department. The UK's unfunded tax cuts last month triggered a collapse in bond markets.
However, even after the Bank of England announced more support for fragile markets, the UK Treasury sell-off has accelerated again as people worry about the size of the borrowing planned by Quatten and Prime Minister Tras.
Kuateng is under pressure and needs to rebuild investor confidence. He announced that he will announce a longer-term tax and expenditure plan and an independent economic forecast on October 31, more than three weeks ahead of the long-term date. He also announced the appointment of experienced Treasury official James Bowler as the new executive secretary of the Treasury. The previous executive secretary Tom Scholar was removed from his post, which made investors feel uneasy.
Last week's newspaper reported that Tras had wanted to hand over the job to an outsider, who had accused the Treasury of following a low-growth "orthodox" economic policy.
UK House of Commons Finance Committee Chairman MelStride said the appointment would help appease investors.
But investors remain anxious, pushing UK longer-term Treasury yields to peak at the end of September, even as the Bank of England expanded emergency market support that will expire on Friday. After the market closed on Monday, U.S. Treasury yields also rose sharply at the beginning of Tuesday, rising 2% at one point, hitting a one-and-a-half high to 3.967%. The opportunity cost of holding gold further increased, which suppressed the gold price.
HSBC Holdings UK interest rate strategy director Daniela Russell said: "So far, the market's reaction is far from encouraging, which indicates that the situation may still be very unstable."
UK Financial Market Conduct Authority (FCA) requires trading platforms to inform the FCA immediately if there is any major deterioration in the market conditions; at the same time, EU 's securities regulator also asked the British authorities about the extreme trends of the market.
Quatten announced the early announcement of the budget, which will allow the Bank of England to take into account the government's tax and expenditure plans before announcing its next interest rate decision on November 3.
Many investors believe that the Bank of England may raise interest rates a full percentage point in response to the inflationary impact of the Quatten tax cut plan.
The central bank will also begin quantitative tightening (QT) on October 31 to sell government bonds, after the work was postponed due to its urgent bond purchase action.
"A lot of risk events are about to happen," said Pooja Kumra, senior European interest rate strategist at TDScurities. "The temporary bond purchase ends, followed by the budget plan and the start of QT on October 31, and the Bank of England meeting on November 3." Russell of HSBC said the Bank of England may have to provide longer-term support to the market and adjust its bond issuance plan to focus on short-term debt, and the UK's debt office may also reduce longer-term bond issuance.
[The dollar rose for the fourth day in a row, investors paid attention to this week's inflation data]
USD rose for the fourth consecutive trading day on Monday, investors were looking forward to the inflation data released by the United States later this week. The data may show that the price pressure of the world's largest economy remains high, allowing the Federal Reserve's radical monetary policy to continue until next year.
On the other hand, the pound fell for the fourth consecutive trading day even after the Bank of England expanded its support for financial markets. Geopolitical tensions and rising oil prices have also rekindled uneasiness about economic growth, pushing investors to switch to the dollar again.
is expected to be released on Thursday to show that overall inflation in September was 8.1%, down from 8.3% in August. Core inflation is expected to rise to 6.5% from 6.3% in August.
New York Last trading , the U.S. dollar index rose 0.36% to 113.18, breaking from the low of around 110 that hit last week and climbing to the 20-year high of 114.78 that hit last month. on Tuesday, the US dollar index is currently trading around 113.25.
Chief Market Strategist Karl Schamotta, Toronto Corpay's chief market strategist, said: "Last Friday's non-farm employment report showed that the labor market is still strong, giving the Fed full confidence to continue hikes."
He added that the minutes of the last Fed meeting, to be released on Wednesday, "may show that policy makers are still willing to bring serious pain to the U.S. and the global economy in their efforts to lower inflation."
[Mainly beneficial to fundamentals]
[After Russia's retaliatory air strike against Ukraine, Ukraine vowed to strengthen its armed forces]
Russia launched the largest air strike since the war began on cities across Ukraine on Monday morning, killing 12 people and injuring dozens of people, forcing thousands of people to flee to air raid shelters, and prompting Kiev to stop exporting electricity to Europe. Ukraine has since vowed to strengthen its armed forces.
Ukrainian officials said that explosions have been reported in Kiev, Lviv , Ternopol and Rytomir in western Ukraine, Dnipro and Kremenchuk in central, Zaporoze in southern and Kharkiv in eastern Kharkiv all reported.
The dozens of cruise missiles launched from the air, land and sea this time, , are at least the widest range of air strikes on targets far away from the front line since the outbreak of the war.
Russian President Putin ordered a "massive" long-range strike after the bridge connecting Russia to Crimean Peninsula was attacked last weekend, and threatened that if Ukraine attacked Russian territory, more strikes would be carried out in the future.
US President Biden condemned Russia's large-scale missile attack in Ukraine, saying that the attack targeted civilians and had no military purpose. Biden vowed that the United States and its allies would continue to make Moscow pay the price.
Ukrainian President Zelensky also spoke with Biden on Monday, and later said that air defense is "the number one priority for our defense cooperation."
Biden told Zelensky that the United States will provide advanced air defense system .The U.S. Department of Defense said on September 27 that it will start delivering the country's advanced surface-to-air missile system in the next two months or so [Ukrainian Ministry of Energy stopped exporting electricity to the EU due to Russian missile attacks]
Ukrainian Ministry of Energy said that the country will stop exporting electricity to the EU after Russia launched a missile attack on its energy infrastructure on Monday. "Today's missile attacks hit thermal power generation and substation , forcing Ukraine to suspend power exports from October 11, 2022 to stabilize its own energy system," the ministry said in a statement on its website.
This makes the European continent, which is already facing a soaring electricity price.
Ukrainian Energy Minister Herman Halushchenko said: "The attack on the energy system was "the biggest during the entire war." The missile attack on the entire supply chain is to make the substation supply as difficult as possible”. In June, the Ukrainian Ministry of Energy said it hopes to obtain 1.5 billion euros (US$1.45 billion) from electricity exports to the EU by the end of the year, and the EU is its main energy export market since the beginning of the war
Zelensky said 12 people were killed in the attack and officials reported dozens of injuries. “We will do everything we can to strengthen our armed forces,” he said in his speech on Monday night. “We will make the enemy on the battlefield even more painful. "
He said the timing of these attacks was deliberately selected to kill and cut off Ukraine's power grid. The Ukrainian Prime Minister reported that 11 major infrastructure targets in eight regions were hit, resulting in power, water or heating in parts of the country being cut off.
Ukrainian Ministry of Defense said in its evening update that Russia carried out at least 84 missile and air strikes, while Ukrainian air defense forces destroyed 43 cruise missiles and 13 drones.
Russian Ministry of Defense said that all predetermined targets had been hit.
Putin's closest ally, Belarusian President Lukashenko, said he had ordered a joint deployment of troops with Russia near Ukraine, accusing Ukraine of planning an attack on Belarus with Western supporters. This became another sign of the possible escalation of the war
[Lukashenko: The West encourages Ukraine to drag Belarus into the war]
Belarus President Lukashenko said on Monday that Belarus and Russia will deploy a joint military task force to cope with the intensification of tensions on the western border of Belarus.
Belarusian President Lukashenko said on Monday that Belarus and Russia will deploy a joint military task force to cope with the intensification of tensions on the western border of Belarus.
Lukashenko stressed that the West encouraged Ukraine to open a second front on the Belarusian border and dragged Belarus into a meaningless war, so that it can deal with Russia and Belarus at the same time.
On the same day, Belarusian Defense Minister Khlenin said that as long as neighbors do not take wrong measures to anger Belarus, Belarus will not go to war with neighboring countries. Khlenin stressed that Belarus only considers defensive plans to deal with possible attacks.
【JPMorgan CEO Dimon warned that the US economy would be on the sixth. In a recession nine months later]
According to media reports on Monday, JPMorgan Chase CEO Dimon said that the U.S. and the global economy may fall into recession by mid-next year.
In an interview, he said that out of control of inflation, a sharp interest rate hike, Russian invasion of Ukraine and the unknown impact of the Federal Reserve's quantitative austerity policy are all signs of a potential recession.
He said: "These are very, very serious things, and I think this is likely to cause the United States and the world - I mean, Europe has fallen into recession - and it is likely to cause the United States to fall into some kind of recession six to nine months later. "
Large U.S. banks will report third-quarter earnings starting Friday. So far this year, the indicator S&P 500 has fallen by about 24%, and the three major U.S. indexes are currently in bear markets.
media quoted Dimon as saying that the S&P 500 may "easy to fall another 20%" from its current level, and this time the 20% drop may be "much more painful than the first time."
[World Bank President and IMF Chairman believe that the global recession risk is rising and calls for coordinated action]
World Bank Governor Malpass and International Monetary Fund (IMF) Chairman Georgieva warned on Monday that the risk of a global recession is increasing and said that inflation remains a persistent problem after Russia invades Ukraine.
"There is a risk and real danger of a global recession next year," Malpass said in a conversation with Georgieva when the first face-to-face meeting between the two institutions since the COVID-19 pandemic began.
He cited slowdown in developed economies and depreciation of currencies in many developing countries, as well as continued inflation concerns.
IMF Chairman said last week that when the IMF released the World Economic Outlook on Tuesday, it will lower its forecast for global economic growth by 2.9% in 2023, citing the impact of the new crown epidemic, Russian invasion of Ukraine and climate disasters on various continents.
On Monday, she pointed out that economic activity in all three major economies is slowing -Europe has been severely hit by high gas prices, real estate market volatility in Asian powers and disruption from the COVID-19 pandemic are dragging down growth, while interest rate hikes in the United States "start to have an impact."
The slowdown in developed economies, rising interest rates, climate risks and continued high food and energy prices have hit developing countries particularly hard, and they called for coordinated action to help emerging markets.
Georgieva, the first IMF chairperson from emerging market economies, said developed economies need to "control the huge and terrible danger of the debt crisis" because it will affect all countries, not just those with heavy debt burdens.
"This is not a beautiful picture. But if we unite, if we act together, we can alleviate the pain that 2023 is before us."
[Railway unions reject temporary labor agreements promoted by Biden, the risk of strike rekindled]
On Monday, most of the railway workers with about 12,000 workers voted to veto a temporary labor agreement partially promoted by U.S. President Biden last month. This is the first time that a deal has been rejected by members of more than a dozen labor groups, and Biden must let them accept it or there is a risk of another strike.
International Brotherhood of Truck Drivers said in a statement that more than 6,600 union members voted against the temporary agreement. This shows that most workers are still unhappy with pay, working conditions and sick leave policies. The National Carriers Conference Committee, which represents freight railways in labor-management negotiations, said that the rejection of the agreement did not bring about the immediate interruption of railway services as both parties agreed to maintain the status quo when discussing the next move.
[ Bank of America warns that the U.S. job market will shrink significantly next year]
According to media reports on October 10, a report released by the Bank of America ( Bank of America 2) on the 7th showed that as the Federal Reserve's pressure on ease inflation to raise interest rates is getting stronger and stronger, the number of non-farm employment will begin to shrink at the beginning of next year. It is expected that the rate of employment growth in the United States in the fourth quarter of this year will be roughly reduced by half, and will reduce by about 175,000 jobs per month in the first quarter of next year.
Chart released by Bank of America shows that unemployment will last for most of 2023.
[ Nasdaq index recorded its lowest closing since July 2020]
U.S. stocks fell on Monday, with the Nasdaq index hitting its lowest closing since July 2020 as investors feared the impact of rising interest rates and withdrew chip stocks after the U.S. announced restrictions aimed at hindering the semiconductor industry, the semiconductor industry, a major Asian power. "People are worried about the economy. People are worried about a possible recession," said Jake Dollarhide, CEO of Longbow Asset Management in Tulsa, Klahoma. "The Russian Dow Jones Industrial Average fell 93.91 points, or 0.32%, to 29,202.88 points; the S&P 500 fell 27.27 points, or 0.75%, to 3,612.39 points; and the Nasdaq. fell 110.30 points, or 1.04%, to 10,542.10.
Before the start of the U.S. third-quarter financial report season, investors were also cautious, which will kick off on Friday, and some major banks will release quarterly reports on the same day.
In recent weeks, estimates for third-quarter performance have declined. Analysts now expect S&P 500 companies to grow year-on-year profits for the quarter, compared with an expected 11.1% increase in early July, according to IBES data from Refinitiv .
Microsoft fell 2.1%, one of the biggest factors that dragged down the three major indexes. technology stocks and energy stocks in the S&P 500 led the decline of each sector.
Overall, the rise in US dollar and US bond yields has significantly suppressed gold prices. Gold prices have continuously lost two key positions on September 21 highs of 1687.95 and 1680. The short-term downward risk has increased significantly, but the K-line shows that the momentum of the US dollar's rise has weakened, and the geopolitical situation in Russia and Ukraine is still tense. Before falling below the 1660 mark, the bulls still have certain opportunities, but they still need to rebound to above the key position of 1687.95 to increase short-term bullish signals. If the US dollar continues to rise and the gold price breaks the support of the 1660 mark, the gold price may further fall to around the lower track of Bollinger Band , near the $1625.
This article is from Huitong.com
