On Tuesday (October 18) Asian session, spot gold hovered around the 1650 mark. On Monday, the new British Chancellor of the Exchequer Hunter overturned Trass' economic plan, helping the British pound and British Treasury bonds rise sharply, and the New York manufacturing data also performed poorly. The US dollar and US bond yields were dragged down, and the US dollar fell 1.05% to a new low in more than a week, providing rebound momentum for gold prices, and the gold price once rose to around $1,668; however, the market's expectations for Fed further sharply in the year interest rate hikes in are lingering, US bond yield turn down to rise in the late trading, US stock rise also suppressed the safe-haven demand for gold, and the gold price eventually fell to around the 1650 mark.
In addition to the Federal Reserve, the European Central Bank, the Bank of England, the New Zealand Federal Reserve and other global central banks will still tend to raise interest rates significantly in the future, which will further increase the opportunity cost of gold; gold ETF positions are still falling, and the technical bearish signal is still strong. Before regaining the 21-day moving average of 1669.25, gold prices will still fluctuate downward in the future.
Of course, you still need to pay close attention to the trend of the US dollar in the short term. If the US dollar further pulls back, it may provide gold prices with opportunities for fluctuating rebound adjustments in the short term. "The dollar has been significantly lower...yields are falling," said Bob Haberkorn, senior market strategist at
RJO Futures, who also pointed out that there are some "risk-averse demand under increased risk of geopolitical ".
This trading day focuses on the US industrial output monthly rate in September, euro zone October ZEW economic prosperity index, pay attention to the speeches of Atlanta Fed Chairman Bostic and Minneapolis Fed Chairman Kashkali , pay attention to the speeches of European Central Bank officials, and pay attention to further news about the UK fiscal policy.
fundamentals are mainly bullish
[New British Exchequer Hunter overturned Trass' economic plan and staged a drama of policy reversal]
New British Exchequer Hunter overturned Prime Minister Tras' economic plan on Monday and reduced his huge energy subsidy plan. This is one of the biggest major fiscal policy reversals in British history to prevent a sharp decline in investor confidence.
A spokesman for Tras denied that Hunter was managing the country after Hunter's new strategy pushed the pound to soar against the dollar and helped UK Treasury prices start to rebound from a sharp drop after the government announced a no-funded tax cut on September 23.
Later Hunter elaborated in Parliament the reasons for the need to reverse almost all growth plans, and Trass was expressionless throughout the process, which helped her become Conservative leader and British Prime Minister less than six weeks ago.
"We are a country that provides funding and repays debts for our commitments," Hunter told parliament, which will be followed by a "hard" decision to cut public spending.
The former diplomatic and health minister was appointed last Friday after Tras removed her close ally Quatten.
Under the new policy, most of Tras' £45 billion unfunded tax cuts will be cancelled, and a two-year energy support scheme for home and business -- expected to cost well over £100 billion -- will now be shortened until the end of next April. The plan will be reviewed later to develop a targeted plan that will cost significantly less than the original plan.
Tras is expected to defend the new policy during Wednesday's weekly parliamentary inquiries. Hunter said the cancellation of planned tax cuts would increase revenue by £32 billion a year, economists said the measures would not fill the public fiscal gap or recover losses caused by the government's radical policies, but a step in the right direction.
Tras said on Twitter: "We have taken action to set a new route for growth to support and serve the people of the UK."
UK Treasury rebounded on Monday, but the damage remains, with the 10-year U.K. bond yields still about 46 basis points above the closing level on September 22. Although the yield gap with comparable German and U.S. bonds narrowed, the blow to British Treasury bonds is still particularly severe.
The Treasury said Hunter will submit a more comprehensive medium-term fiscal plan as scheduled on October 31, and will also announce the forecast of the independent Office of Budget Responsibility (OBR).
On Monday, the pound rebounded more than 2% against the US dollar, hitting a new high of 1.1439 in a week and a half, closing at 1.1358, with rising by about 1.63%, and the US dollar was greatly dragged down.
[USD fell to more than one week's low]
USD fell against a basket of major currencies on Monday, hitting a low of 111.92, closing at 112.10, down about 1.05%. Therefore, the former new British Chancellor abandoned most of the government's "mini budget", and Bank of America better than expected profits boosted risk appetite . "The pound has been the driver of the forex market so far this month, and the big reversal announced by the UK government restored confidence in the pound and took away the dollar buying," said Chris Beauchamp, chief market analyst at
IG. "At present, the market seems happy to give the new Chancellor time and space to clean up the government's mess."
0 reported a smaller-than-expected quarterly profit drop, and said that its U.S. retail customer spending remained strong even as it slowed down, suppressing the dollar's safe-haven buying demand.
【9000 Russian soldiers are arriving at Belarus 】
Belarusian Ministry of Defense announced on the 17th that Russia will transport about 170 tanks to Belarus as part of the deployment of the alliance's regional forces. In addition, up to 100 artillery and mortar with caliber exceeding 100 mm will be shipped from Russia to Bai. The Belarusian Ministry of Defense said on the 16th that Russian soldiers participating in the formation of the Russian-Belarusian alliance countries and regions are arriving in Belarus one after another. It is expected that the total number of Russian troops participating in the 16th country and regional troops will be close to 9,000.
[Ukrainian media: Russia launched 9 missile attacks on Ukraine in the past day, 39 air strikes]
According to the Ukrainian National News Agency on Monday, in the past day, the Russian army launched 9 missile strikes and 39 air strikes on Ukraine, and used the multi-barrel rocket launch system (MLRS) to conduct about 30 shots.
The General Staff of the Ukrainian Armed Forces reported that more than 25 settlements were attacked by artillery fire, including Kiev , Zaboroze , Kozacharopani, etc. The Russian army used cruise missile , air-launched missiles and air defense missiles, as well as the Shahed-136 suicide drone made by Iranian to strike Ukraine. The Russian army tried to defend the temporarily occupied areas and concentrate its efforts to limit the Ukrainian Defense Forces' actions in certain directions. Meanwhile, the Russian army continued to attempt to attack in the direction of Bachmut and Awadivka. In the past 24 hours, Ukrainian troops repelled Russian attacks near several settlements in the Donetsk area.
[Europe is experiencing unprecedented energy shock]
Recently, Tabarelli, head of an Italian energy research institution, said in an interview with Italian media that the current price of Italian natural gas has increased by twice compared with previous years, and the electricity price has almost doubled. European countries, including Italy, are experiencing an unprecedented energy shock.
Earlier this month, Tabarelli said it would take at least two to three years for Italy to replace imported natural gas from Russia through other channels or methods.
[US manufacturers are pessimistic about future corporate conditions]
data shows that New York html 1st manufacturing activity fell sharply, and manufacturers are pessimistic about the business conditions in the next six months.
New York Federal Reserve Bank announced on Monday that the manufacturing index, which measures the current corporate conditions, fell to negative 9.1 in October, and is estimated to be negative 4.0. The index below zero indicates that New York manufacturing is shrinking.
The survey's new order index is 3.7, the same as in September. The paying price index was 48.6, with September reaching 39.6. The employment index was 7.7, and September was 9.7. Manufacturers are generally pessimistic about the prospects for the next six months. This month, the future business conditions index was negative 1.8, and September was 8.2.
[The model shows that the probability of a recession in the US economy reaches 100% within one year]
Bloomberg Economic Research's new model prediction shows that the US economy will almost certainly fall into recession in the next 12 months. This is not good news for the economic message that U.S. President 1 Joe Biden is going to convey before the November midterm elections.
Bloomberg The latest recession probability model by economists Anna Wong and Eliza Winger shows that the likelihood of recession increases during all forecast periods, with the 12-month period forecast for the 12-month period to October 2023 reaching 100%, higher than the 65% at the last update.
fundamental negative fundamentals
[U.S. stock market rebounded sharply, boosted by a major reversal of US banking performance and UK policy]
US stock market rebounded sharply on Monday after a major reversal of economic plan in the UK, and Bank of America became the latest financial company to release solid quarterly results, which boosted optimism about corporate earnings season.
The UK appointed Hunter as Chancellor of the Exchequer, who once he took office, overturned many of Prime Minister Tras' fiscal measures that have disturbed the market in recent weeks.
Bank’s shares rose 6.06% as its net interest income was boosted by rising interest rates this quarter.
Overall, interest rate hikes boosted interest income for banks in the third quarter, allowing investors to see the current financial report season exceeding expectations after the downward revision. According to Refinitiv data, analysts expect corporate earnings to grow 3% in the third quarter, lower than expected growth of 4.5% at the beginning of the month and 11.1% expected growth on July 1.
JohnHancockInvestmentManagement Co-Chief Investment Strategist Emily Roland said: "In such a fragile market, any kind of good news can play a big role."
is centered around the improvement of the COVID-19 sentiment in the UK, and the financial industry's profits are supported by a series of factors. The improvement in net interest margin is one of the key factors. The interest rate hike will be beneficial to banks, so the third-quarter earnings may not look as bad as worried. What I want to say is that it may not necessarily be better than worrying. "Has the close of the market, the Dow Jones Industrial Average rose 1.86% to 30,185.82 points, the S&P 500 climbed 2.65% to 3,677.95 points, and Nasda rose 3.43% to 10,675.80 points, and Roland said, "The Fed currently dominates the market, and the Fed policy is the key driver. They are implementing the most radical austerity policy in the shortest time our generation has seen. It is important to remember that the Fed's policy has lagged behind on its effectiveness. "
[The probability of the Federal Reserve raising interest rates by 75 basis points in November is 94.7%]
According to CME's "Feder Observation": The probability of the Federal Reserve hike rate by 50 basis points to the range of 3.50%-3.75% is 5.3%, and the probability of 75 basis points is 94.7%; the probability of a cumulative interest rate by 100 basis points by December is 1.5%, the probability of a cumulative interest rate by 125 basis points is 30.5%, and the probability of a cumulative interest rate by 150 basis points is 68.0%
[U.S. long-term bond yield remains strong]
U.S. long-term Treasury bond yield turned from decline on Monday, market trading was light, and capital flows drove the market Investor concerns have been slightly alleviated after the new British Chancellor Hunter overturned most of British Prime Minister Tras’ economic growth plans.
This injected an overall optimism into the global market after several days of political and financial chaos.
analysts said U.S. Treasury yields were synchronized with the British bond market earlier in the session, but market capital flows were driven by two-way from late morning to afternoon trading. Gennadiy Goldberg, senior interest rate strategist at TDScurities in New York, said, “Liquidity is quite thin, and smaller capital flows in recent days tend to drive the market, so this could be the cause of volatility and some reversals.” ”
He added: “In the past few weeks, U.S. debt has been more or less associated with the UK, especially at the long end of the curve because of the great volatility. ”
UK 30-year Treasury yield fell by more than 40 basis points at the highest, but broke off these lows at 4.359%. The 20-year Treasury yield also rebounded from a sharp decline, flat at 4.457% on the day.
US Treasury yields also rebounded from low levels. The 10-year U.S. Treasury yield rose 1.3 basis points to 4.019%. The 30-year U.S. Treasury yield rose 4.3 basis points to 4.018%.
"I think there is no real change in the domestic (US) aspect," said Goldberg of TD Securities. "The Federal Reserve is still hawkish. They are telling you that they will continue to raise interest rates, which will not change until the November meeting."
It should be noted that Although the U.S. Treasury yield ended up rising on Monday, causing gold prices to give up some gains in the short term, the 10-year Treasury yield -day K-line recorded a cross star, and weakened slightly during the Asian session on Tuesday. Previously, the 10-year Treasury yield had been positive for the weekly eleven consecutive days, and the upward momentum had weakened. If the negative line was recorded on this trading day, you need to be wary of the risk of peaking and it is expected to provide gold prices with rebound opportunities in the medium and long term.
[ANZ : New Zealand Fed is expected to raise interest rates by 75 basis points in November and February next year]
ANZ New Zealand Economists said after the release of New Zealand's third-quarter inflation data, it is expected that the New Zealand Fed will raise the official cash rate by 75 basis points at its policy meetings in November and February next year, and then stop to evaluate. This will bring the official cash rate (OCR) to a peak of 5% in February. Both rate hikes depend on whether global financial markets can remain consistent. There is no doubt that such a big move is risky and likely to prove to be a mistake in the later stages of the (rate hike) cycle. But today's data leaves the New Zealand Fed with no choice. They are much behind in inflation than they thought. New Zealand's inflation rate is currently at a 32-year high, which has stimulated the market's bet on the New Zealand Fed's interest rate hike.
[ECB Governing Commission Nagel: Policy stimulus must be quickly revoked and interest rate hikes cannot be stopped too early]
ECB Governing Commission Joachim Nagel said on Monday that the ECB must continue to quickly reduce monetary support and cannot be stopped too early. Given that inflation is “amazingly high” and policies remain loose, officials “must quickly remove the stimulus.”
Borough Central Bank Governor Nagel told students at Harvard University on Monday. If necessary, the borrowing costs will have to “enter the restricted area”.
"We must never relax until we return to price stability," Nagel said. "A premature stop may lead to longer high inflation, and then a tighter monetary policy is needed, which may lead to a more serious economic recession."
[Gold ETF positions continue to decline]
The world's largest gold ETF - SPDRGoldTrust's position decreased by 2.03 tons on Monday compared with the previous trading day, and the current position is 939.1 tons, hitting a new low since the end of March 2020, suggesting that under the expectation of global central banks such as the Federal Reserve will significantly raise interest rates, institutions and professional investors are still inclined to bear the gold price in the medium and long term.
Overall, the short-term trend is variable. In terms of fundamentals, after British Chancellor Hunter overturned Trass' economic plan, the pound led to a rebound in most non-US currencies, and the short-term downward pressure on the US dollar remains. If the US dollar further pulls back, it is expected to provide gold prices with a further rebound opportunity; what needs more attention is the performance of US Treasury yields. If the US Treasury yields remain strong, it will put gold prices under pressure again.
This article is from Huitong.com
On Monday, the pound rebounded more than 2% against the US dollar, hitting a new high of 1.1439 in a week and a half, closing at 1.1358, with rising by about 1.63%, and the US dollar was greatly dragged down.
[USD fell to more than one week's low]
USD fell against a basket of major currencies on Monday, hitting a low of 111.92, closing at 112.10, down about 1.05%. Therefore, the former new British Chancellor abandoned most of the government's "mini budget", and Bank of America better than expected profits boosted risk appetite . "The pound has been the driver of the forex market so far this month, and the big reversal announced by the UK government restored confidence in the pound and took away the dollar buying," said Chris Beauchamp, chief market analyst at
IG. "At present, the market seems happy to give the new Chancellor time and space to clean up the government's mess."
0 reported a smaller-than-expected quarterly profit drop, and said that its U.S. retail customer spending remained strong even as it slowed down, suppressing the dollar's safe-haven buying demand.
【9000 Russian soldiers are arriving at Belarus 】
Belarusian Ministry of Defense announced on the 17th that Russia will transport about 170 tanks to Belarus as part of the deployment of the alliance's regional forces. In addition, up to 100 artillery and mortar with caliber exceeding 100 mm will be shipped from Russia to Bai. The Belarusian Ministry of Defense said on the 16th that Russian soldiers participating in the formation of the Russian-Belarusian alliance countries and regions are arriving in Belarus one after another. It is expected that the total number of Russian troops participating in the 16th country and regional troops will be close to 9,000.
[Ukrainian media: Russia launched 9 missile attacks on Ukraine in the past day, 39 air strikes]
According to the Ukrainian National News Agency on Monday, in the past day, the Russian army launched 9 missile strikes and 39 air strikes on Ukraine, and used the multi-barrel rocket launch system (MLRS) to conduct about 30 shots.
The General Staff of the Ukrainian Armed Forces reported that more than 25 settlements were attacked by artillery fire, including Kiev , Zaboroze , Kozacharopani, etc. The Russian army used cruise missile , air-launched missiles and air defense missiles, as well as the Shahed-136 suicide drone made by Iranian to strike Ukraine. The Russian army tried to defend the temporarily occupied areas and concentrate its efforts to limit the Ukrainian Defense Forces' actions in certain directions. Meanwhile, the Russian army continued to attempt to attack in the direction of Bachmut and Awadivka. In the past 24 hours, Ukrainian troops repelled Russian attacks near several settlements in the Donetsk area.
[Europe is experiencing unprecedented energy shock]
Recently, Tabarelli, head of an Italian energy research institution, said in an interview with Italian media that the current price of Italian natural gas has increased by twice compared with previous years, and the electricity price has almost doubled. European countries, including Italy, are experiencing an unprecedented energy shock.
Earlier this month, Tabarelli said it would take at least two to three years for Italy to replace imported natural gas from Russia through other channels or methods.
[US manufacturers are pessimistic about future corporate conditions]
data shows that New York html 1st manufacturing activity fell sharply, and manufacturers are pessimistic about the business conditions in the next six months.
New York Federal Reserve Bank announced on Monday that the manufacturing index, which measures the current corporate conditions, fell to negative 9.1 in October, and is estimated to be negative 4.0. The index below zero indicates that New York manufacturing is shrinking.
The survey's new order index is 3.7, the same as in September. The paying price index was 48.6, with September reaching 39.6. The employment index was 7.7, and September was 9.7. Manufacturers are generally pessimistic about the prospects for the next six months. This month, the future business conditions index was negative 1.8, and September was 8.2.
[The model shows that the probability of a recession in the US economy reaches 100% within one year]
Bloomberg Economic Research's new model prediction shows that the US economy will almost certainly fall into recession in the next 12 months. This is not good news for the economic message that U.S. President 1 Joe Biden is going to convey before the November midterm elections.
Bloomberg The latest recession probability model by economists Anna Wong and Eliza Winger shows that the likelihood of recession increases during all forecast periods, with the 12-month period forecast for the 12-month period to October 2023 reaching 100%, higher than the 65% at the last update.
fundamental negative fundamentals
[U.S. stock market rebounded sharply, boosted by a major reversal of US banking performance and UK policy]
US stock market rebounded sharply on Monday after a major reversal of economic plan in the UK, and Bank of America became the latest financial company to release solid quarterly results, which boosted optimism about corporate earnings season.
The UK appointed Hunter as Chancellor of the Exchequer, who once he took office, overturned many of Prime Minister Tras' fiscal measures that have disturbed the market in recent weeks.
Bank’s shares rose 6.06% as its net interest income was boosted by rising interest rates this quarter.
Overall, interest rate hikes boosted interest income for banks in the third quarter, allowing investors to see the current financial report season exceeding expectations after the downward revision. According to Refinitiv data, analysts expect corporate earnings to grow 3% in the third quarter, lower than expected growth of 4.5% at the beginning of the month and 11.1% expected growth on July 1.
JohnHancockInvestmentManagement Co-Chief Investment Strategist Emily Roland said: "In such a fragile market, any kind of good news can play a big role."
is centered around the improvement of the COVID-19 sentiment in the UK, and the financial industry's profits are supported by a series of factors. The improvement in net interest margin is one of the key factors. The interest rate hike will be beneficial to banks, so the third-quarter earnings may not look as bad as worried. What I want to say is that it may not necessarily be better than worrying. "Has the close of the market, the Dow Jones Industrial Average rose 1.86% to 30,185.82 points, the S&P 500 climbed 2.65% to 3,677.95 points, and Nasda rose 3.43% to 10,675.80 points, and Roland said, "The Fed currently dominates the market, and the Fed policy is the key driver. They are implementing the most radical austerity policy in the shortest time our generation has seen. It is important to remember that the Fed's policy has lagged behind on its effectiveness. "
[The probability of the Federal Reserve raising interest rates by 75 basis points in November is 94.7%]
According to CME's "Feder Observation": The probability of the Federal Reserve hike rate by 50 basis points to the range of 3.50%-3.75% is 5.3%, and the probability of 75 basis points is 94.7%; the probability of a cumulative interest rate by 100 basis points by December is 1.5%, the probability of a cumulative interest rate by 125 basis points is 30.5%, and the probability of a cumulative interest rate by 150 basis points is 68.0%
[U.S. long-term bond yield remains strong]
U.S. long-term Treasury bond yield turned from decline on Monday, market trading was light, and capital flows drove the market Investor concerns have been slightly alleviated after the new British Chancellor Hunter overturned most of British Prime Minister Tras’ economic growth plans.
This injected an overall optimism into the global market after several days of political and financial chaos.
analysts said U.S. Treasury yields were synchronized with the British bond market earlier in the session, but market capital flows were driven by two-way from late morning to afternoon trading. Gennadiy Goldberg, senior interest rate strategist at TDScurities in New York, said, “Liquidity is quite thin, and smaller capital flows in recent days tend to drive the market, so this could be the cause of volatility and some reversals.” ”
He added: “In the past few weeks, U.S. debt has been more or less associated with the UK, especially at the long end of the curve because of the great volatility. ”
UK 30-year Treasury yield fell by more than 40 basis points at the highest, but broke off these lows at 4.359%. The 20-year Treasury yield also rebounded from a sharp decline, flat at 4.457% on the day.
US Treasury yields also rebounded from low levels. The 10-year U.S. Treasury yield rose 1.3 basis points to 4.019%. The 30-year U.S. Treasury yield rose 4.3 basis points to 4.018%.
"I think there is no real change in the domestic (US) aspect," said Goldberg of TD Securities. "The Federal Reserve is still hawkish. They are telling you that they will continue to raise interest rates, which will not change until the November meeting."
It should be noted that Although the U.S. Treasury yield ended up rising on Monday, causing gold prices to give up some gains in the short term, the 10-year Treasury yield -day K-line recorded a cross star, and weakened slightly during the Asian session on Tuesday. Previously, the 10-year Treasury yield had been positive for the weekly eleven consecutive days, and the upward momentum had weakened. If the negative line was recorded on this trading day, you need to be wary of the risk of peaking and it is expected to provide gold prices with rebound opportunities in the medium and long term.
[ANZ : New Zealand Fed is expected to raise interest rates by 75 basis points in November and February next year]
ANZ New Zealand Economists said after the release of New Zealand's third-quarter inflation data, it is expected that the New Zealand Fed will raise the official cash rate by 75 basis points at its policy meetings in November and February next year, and then stop to evaluate. This will bring the official cash rate (OCR) to a peak of 5% in February. Both rate hikes depend on whether global financial markets can remain consistent. There is no doubt that such a big move is risky and likely to prove to be a mistake in the later stages of the (rate hike) cycle. But today's data leaves the New Zealand Fed with no choice. They are much behind in inflation than they thought. New Zealand's inflation rate is currently at a 32-year high, which has stimulated the market's bet on the New Zealand Fed's interest rate hike.
[ECB Governing Commission Nagel: Policy stimulus must be quickly revoked and interest rate hikes cannot be stopped too early]
ECB Governing Commission Joachim Nagel said on Monday that the ECB must continue to quickly reduce monetary support and cannot be stopped too early. Given that inflation is “amazingly high” and policies remain loose, officials “must quickly remove the stimulus.”
Borough Central Bank Governor Nagel told students at Harvard University on Monday. If necessary, the borrowing costs will have to “enter the restricted area”.
"We must never relax until we return to price stability," Nagel said. "A premature stop may lead to longer high inflation, and then a tighter monetary policy is needed, which may lead to a more serious economic recession."
[Gold ETF positions continue to decline]
The world's largest gold ETF - SPDRGoldTrust's position decreased by 2.03 tons on Monday compared with the previous trading day, and the current position is 939.1 tons, hitting a new low since the end of March 2020, suggesting that under the expectation of global central banks such as the Federal Reserve will significantly raise interest rates, institutions and professional investors are still inclined to bear the gold price in the medium and long term.
Overall, the short-term trend is variable. In terms of fundamentals, after British Chancellor Hunter overturned Trass' economic plan, the pound led to a rebound in most non-US currencies, and the short-term downward pressure on the US dollar remains. If the US dollar further pulls back, it is expected to provide gold prices with a further rebound opportunity; what needs more attention is the performance of US Treasury yields. If the US Treasury yields remain strong, it will put gold prices under pressure again.
This article is from Huitong.com
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