The global market has changed last week, and the US non-agricultural sector reversed expectations of the short-term shift in the Federal Reserve's policy. The Organization of Oil-producing Countries (OPEC+) plans to cut production by 2 million barrels per day to help international oil prices rebound sharply.
In terms of global markets, US stock rose first and then fell, the Dow Jones Industrial Average rose 1.99% weekly, Nasdaq html rose 0.73% weekly, and S&P 500 html rose 1.51% weekly. The three major European stock indexes stabilized, the UK's FTSE 100 index rose 1.41% weekly, the German DAX 30 index rose 1.31% weekly, and the French CAC 40 index rose 1.82% weekly.
This week, the International Monetary Fund (IMF) and World Bank will hold their annual meeting in Washington, and the IMF will release the world economic outlook and global financial stability report. IMF President Georgieva Local time said on the 6th that the risk of a global economic recession is intensifying and will lower the global economic growth expectations for next year. At the same time, the Federal Reserve will release the minutes of the meeting, and Fed officials will continue to deliver speeches, and the latest inflation data to be released will become an important reference for markets to evaluate policy prospects. The Bank of England's intervention in the purchase of Phnom Penh bonds has expired, and whether the pound exchange rate will fluctuate has also attracted much attention. The U.S. stock financial report season will kick off, and financial stocks such as , JPMorgan, , will be the first to debut.
U.S. inflation is expected to "high fever will not fade"
Data from the U.S. Department of Labor shows that 263,000 new jobs were added in the United States in September, and wages increased by 5.0% from the same period last year, lower than the annual growth rate of 5.2% in August. Analysts believe that although labor demand is cooling, there is still a long way to go to restore the balance between labor supply and demand.
Over the past week, several Fed officials have continued to emphasize their determination to suppress inflation, suggesting that monetary policy will not turn too early. This week, several Fed officials, including Fed Vice Chairman Brainard , will continue to make speeches, and the market will try to find more policy clues from the latest statements. In addition, the Federal Reserve will release minutes of last month's policy meeting. As the Economic Outlook Forecast (SEP) has attracted widespread attention, details of discussions on inflation, rate hikes in and economic outlook can be paid attention to. In terms of
data, the United States will update the latest consumer price index (CPI) this week. Although oil prices fell last month, the rise in prices of rents, medical and other projects may continue to put pressure on inflation. Currently, the market expects the US CPI to grow by 8.1% year-on-year in September, breaking 8 for seven consecutive months, and a month-on-month increase of 0.2%. The day before, the Producer Price Index (PPI) will be announced. Although the price pressure on producers has eased with the improvement of supply chains and the improvement of supply and demand relationships in recent times, the cooling is expected to be slow, and the market expects PPI to drop from 8.7% in September to 8.3% from the previous 8.7%.
The data worth paying attention to in the next week also include the monthly retail sales rate in September and the University of Michigan Consumer Confidence Index. Inflation pressure may continue to affect household consumption options in the United States, and the growth in consumption of essential goods such as energy and food will be offset by inflation factors. The institution predicts that the monthly growth rate of retail sales in September will fall by 0.1 percentage point to 0.2%, and the monthly growth rate of core retail sales in , which does not include energy and food, will fall by 0.1%.
financial report season will kick off this week. Financial stocks such as Wells Fargo , JPMorgan Chase, Morgan Stanley , BlackRock will be the first to disclose their performance. Other companies worth paying attention to include Pepsi and Delta Air Lines .
Crude oil and gold
International oil prices rose for five consecutive days last week, and OPEC+ production cuts stimulated market confidence and enthusiasm. WTI crude oil contract closed at $92.64 per barrel, up 16.54% weekly, and Brent crude oil contract closed at $97.92 per barrel, up 15.01% weekly.
Commerzbank said in the report that OPEC+ avoids the oil market from continuing to suffer a shock by cutting quota of 2 million barrels of daily production. In fact, as production in many countries is already well below quotas, daily output may actually fall by only 1 million barrels, but that is still enough to prevent oversupply in the last quarter of the year.Bart Melek, head of strategy for
, TD Securities, said that the reason why the news of production cuts has had such a big impact on crude oil price is that investors have always expected OPEC+ quota to be reduced. "If such a large-scale reduction is achieved, it may further lead to a reduction in global oil inventories. In our environment, OPEC is a volatile producer, and they are the only consortium with a lot of idle production capacity," he said.
Although gold weakened after the release of the US non-farm report, international gold prices still recorded a second consecutive week of rise. COMXE gold futures price for December delivery on the New York Mercantile Exchange closed at $1,709.30 per ounce, up 2.17% weekly.
Some analysts believe that the strong US September non-farm employment report means that market expectations about the "Feder's interest rate hike policy may turn" are damaged, and the US dollar may continue to be supported, and investors will avoid the gold market, and the breakthrough in Treasury bond yields will lead to further decline in the attractiveness of gold. Jim Wyckoff, senior Kitco analyst, said the labor market was in better shape than expected, which gave the Fed enough wiggle room to continue to raise interest rates without worrying about the damage to the economy.
Wolfpack Capital Chief Investment Officer Jeff Wright pointed out that a data point in the non-farm report is an average hourly revenue growth of 5% year-on-year, which indicates inflationary pressure, and the Fed is expected to raise interest rates by another 75 basis points in November. "There is no sign that there will be a pause in the near future. Currently, I am negative about the prospects of gold. As interest rates rise, I don't see the basic reason to buy gold," he said.
Lagarde How to deal with economic pressure
Europe is still worried about the energy problem this winter. European Commission Chairman von der Leyen said last week that Russia's pipeline natural gas supply to EU has dropped from 40% to 7.5%. Partners such as the EU and Norway have strengthened negotiations on natural gas prices. She proposed that in the future, it is necessary to cooperate with EU member states to purchase natural gas and discuss the setting of a gas price ceiling for power generation. The latest ECB minutes released by
show that policy makers seem increasingly worried that high inflation may become deeply rooted. Even if we have to pay the price of weak economic growth, radical monetary tightening should be adopted. Currently, the market expects that the ECB may continue to raise interest rates by 75 basis points at the next interest rate meeting, but the economic consequences of excessively tight policies are arousing concerns from the outside world. This week, several ECB Management Committee executives, including ECB Governor Lagarde, will attend the annual meeting of the International Finance Association (IIF) in Washington, and the outside world is concerned about whether clues to future policy paths will be revealed.
British Chancellor Kwateng admitted last week that the government's latest economic plan triggered "some volatility". He issued a statement saying that he would abandon the previously proposed plan to cancel the maximum income tax rate of 45% for high-income earners. The British government announced a series of measures last month to boost the economy, including a large-scale tax cut, which resulted in widespread doubts and criticism, and caused a record low in the pound to the dollar and a sharp fluctuation in the price of British Treasury bonds, and the Bank of England was forced to enter and intervene. More than 0 members of the Bank of England Policy Committee (MPC) will speak this week, and topics involving bond purchases, government budgets and economic prospects will attract attention. On October 14, the Bank of England's Phnom Penh bond purchase intervention expires, and it is necessary to pay attention to changes in the pound and UK Treasury bond trends.
Citibank Interest rate strategist Jamie Searle wrote in a note that UK gold pheasant bonds continue to face bearish prospects, with factors leading to bearishness including the upcoming fiscal plan. Another factor is that UK Treasury issuances may be difficult to digest in the coming months given the uncertainty of interest rates, with Searle setting a 10-year Treasury yield target at 4.5%.
This week's highlights
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