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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Official Website]: Gold prices approach 4,000 mark, expectations of Fed interest rate cuts heat up, and political uncertainty in the United States, France and Japan boosted." Hope it will be helpful to you! The original content is as follows:
On Tuesday (October 7 Beijing time), spot gold trading was around $3,971/ounce, and gold prices hit a new record high on Monday to $3,976.06/ounce, boosted by rising expectations of a Fed rate cut this month and economic and political uncertainty in the United States, France and Japan; U.S. crude oil trading was around $61.73/barrel, and oil prices rose on Monday, after OPEC+ planned to increase production in November smaller than expected, eased some concerns about increased supply, but weak demand outlook may limit recent gains.
The chip sector led the rise after chip maker AMD said it would supply AI chips to OpenAI, a deal that could bring in tens of billions of dollars in revenue each year and allows OpenAI to acquire up to 10% of the lwcgm.cnpany's shares. AMD shares soared 23.7%, while the Philadelphia Semiconductor Index rose 2.9%.
Robert Pavlik, senior portfolio manager at DakotaWealth in Fairfield, Connecticut, said the market showed some strength in areas such as technology and consumer discretionary products, in contrast to the government shutdown, and the market remains interested in AI transactions and related lwcgm.cnpanies.
Pavlik added: "It's a wave, and the wave won't last forever; it will eventually reach its peak and fall back. But we're nowAt what stage of this wave? This cannot be judged. ”
The federal government has been shut down for the sixth consecutive day due to the party deadlock, and the release of key economic data has been postponed, forcing investors to rely on secondary and unofficial data to determine the timing and extent of the Fed's interest rate cut.
Although some monetary policy makers warn that inflation is still high and there should be no rush to lower the federal funds target rate, some believe that the labor market has shown signs of weakness and support rate cuts.
The financial market has almost lwcgm.cnpletely digested the Fed's expectation of a 25 basis point cut at the end of the October meeting, with a probability of 94.6%.
New U.S. government data is lacking this week, and market participants will focus on consumer credit balances, mortgage demand and the initial confidence of the University of Michigan in October Step evaluation.
Dow Jones Industrial Average fell 0.14% to 46,694.97 points; S&P 500 rose 0.36% to 6,740.28 points; Nasdaq rose 0.71% to 22,941.67 points.
Among the 11 major sectors of the S&P 500, the consumer discretionary sector led the rise, and the real estate sector fell the most. Next week, third-quarter results will become a market catalyst, and large U.S. banks will release financial reports.
According to data from London Stock Exchange Group (LSEG), analysts expect S&P 500 lwcgm.cnponents to grow overall profits in the third quarter by 8.8% year-on-year, 0.8 percentage points higher than forecasts at the beginning of the third quarter.
According to data from London Stock Exchange Group (LSEG), analysts expect S&P 500 lwcgm.cnponents to grow 8.8% year-on-year, 0.8 percentage points higher than forecasts at the beginning of the third quarter. p>
Tesla rose 5.5% after the electric vehicle maker predicted an event on social platform X on Tuesday. TDCowen lowered Starbucks=’s target price, citing weak labor market impacts Gen Z, with Starbucks stock price falling 5.0%.
Gold surged to an all-time high of more than $3,900 an ounce on Monday, boosted by rising expectations of a Fed rate cut this month and economic and political uncertainty in the U.S., France and Japan.
Spot gold hit a high of $3,976.06 during the session on Monday. U.S. gold futures for December delivery closed up 1.7% to $3,976.3 an ounce.
Marex analyst E dwardMeir said the development of France's political situation, rising Japanese government yields under inflation concerns and continued shutdowns are all the reasons for gold's surge.
The new French Prime Minister Sebastien Lecornu and his government resigned on Monday hours after taking office, deepening the country's political crisis.
At the same time, the U.S. government shutdown has entered its sixth day, and the White House threatens to cut federal staff on a large scale.
Backed by the Fed's interest rate cut, the central bank's continued purchases, constant demand for safe-haven demand and widespread weakening of the U.S. dollar, gold has climbed 50% so far this year, setting a record high. Spot gold prices broke through $3,000 per ounce for the first time in March and broke at the end of SeptemberBreak $3,800 per ounce. In times of low interest rate environment and economic instability, non-interest gold is popular.
Investors are currently pricing that the Fed will cut interest rates by 25 basis points at this month's meeting and is expected to cut interest rates by another 25 basis points in December.
UBS said in a report that we believe gold has reason to rebound further due to fundamentals and momentum, and now it is expected that gold prices will reach $4,200 per ounce by the end of this year.
Spot silver climbed 1.4% to $48.66 per ounce, the highest level in more than 14 years. Platinum rose 1.4% to $1,626.75; palladium rose 4.3% to $1,315.17. Oil markets
Oil prices rose more than 1% on Monday after OPEC+ planned to increase production in November smaller than expected, eased some concerns about increased supply, but weak demand outlook could limit recent gains.
Brent crude oil futures closed up 1.46% to $65.47 a barrel; U.S. crude oil was $61.69, up 1.33%.
LipowOil Associates president Andrew Lipow said the market believes that given that some of the OPEC+ member countries are already producing at full capacity, the actual amount of oil entering the market will be far less than they announced.
OPEC+ said on Sunday it would increase oil production by 137,000 barrels per day from November, choosing a rather modest monthly increase as October, as concerns about oversupply continued to exist in the market. Before the meeting, sources said that although Russia advocated a 137,000 barrels per day increase to avoid pressure on prices, Saudi Arabia would rather double, triple or even quadruple the output to quickly regain market share.
In the short term, some analysts expect the upcoming refinery overhaul season in the Middle East to help curb oil prices. Expectations of weak fundamentals in the fourth quarter are another factor limiting the market's upward trend.
The U.S. Energy lwcgm.cnrmation Administration (EIA) said last week that U.S. crude, gasoline and distillate stocks increased more than expected in the week ended September 26 due to weak refining activity and demand.
The yen and euro weakened against the dollar on Monday as Japan's ruling Liberal Democratic Party elected a new leader and the resignation of a new French government sparked concerns about fiscal and political stability.
The ruling Japanese party elected conservative Saeon Takashi as the party leader last Saturday, pushing the yen to fall. Takashi Saemi is an advocate of the late Prime Minister Shinzo Abe's "Abenomics" strategy, which aims to stimulate the economy through active spending and loose monetary policy. Her victory has led traders to reduce bets on the Bank of Japan's interest rate hike this month.
Sarah Ying, head of foreign exchange strategy, fixed income and lwcgm.cnmodity strategy at Imperial Canadian lwcgm.cnmercial Bank in Toronto, said: "Takashi Saemi will become Prime Minister, which is a sign of sensation.Accident. Given that Takashi Saemi is often seen as a follower of Abenomics, there is now more focus on long-term government bonds. The market expects Japan to introduce more fiscal stimulus measures. ”
The dollar rose more than 2% against the yen at one point to 150.47 yen, the highest since August 1. The latest up 1.87% to 150.2, which would be the biggest single-day gain since May 12 if the momentum continues.
The Bank of Japan maintained a cautiously optimistic economic forecast on Monday, but warned that there is still uncertainty about the impact of U.S. tariffs on corporate profits, indicating its tendency to wait for more data before hikes.
The euro reached 176.25 yen intraday, the highest level since the establishment of the euro in 1999.
However, the euro fell against the dollar and pound, after the new French Prime Minister Le Cord Sebastien Lecornu and his government resigned a few hours after announcing the cabinet list on Monday, becoming the shortest-term government in modern French history.
Ying said that this is not a survival crisis, but considering the current budget situation, the domestic situation does not look good. The biggest risk is that Macron (the president) resigns, but the possibility of such a situation is not high.
The euro fell 0.26% against the dollar to $1.171. It had previously hit $1.1649, the lowest level since September 25. The euro and pound also fell to the lowest level since September 18.
Euro-USD senior officials said on Monday that As the risk of inflation is increasing, the ECB may need to reduce borrowing costs slightly, but current interest rates are appropriate. The U.S. dollar index rose 0.4% to 98.11.
Traders are waiting for signs of a reopening of the U.S. federal government, which has so far failed to pass a bill to continue to allocate funds for government operations.
The government shutdown has delayed the release of the monthly jobs report in September last Friday and other important data after the government reopens. This has also led to lower market volatility.
Barclays analysts led by Themistoklis Fiotakis said in a report that financial markets have been volatile since the U.S. government shutdown Decline. Risks on U.S. economic activity and labor markets that federal staff take unpaid leave or even fired will not appear for some time.
As data show weak labor market, the market generally expects the Federal Reserve to cut interest rates by 25 basis points at its meeting on October 28-29.
According to CME’s FedWatch tool, traders expect another rate cut in December is 83%, but this may depend on data released before the meeting.
On October 7, local time, the Palestinian Islamic Resistance Movement (Hamas)) The delegation said after ending indirect negotiations with Israel that the talks had made positive progress, but the continued bombing of Israeli on the Gaza Strip "posed a challenge" to the release of Israel's detained personnel.
The resigned French Prime Minister Le Cornie posted on social media on the evening of the 6th that he was ordered by President Macron to conduct a two-day "final negotiations" with various political parties in order to maintain national stability. Le Kearney said he will report the negotiation results to Macron on the evening of the 8th local time, and the latter will make necessary decisions based on this.
People familiar with the matter revealed that the Argentine government sold US dollars in the foreign exchange market on Monday. This is the fifth consecutive trading day of the country's government's intervention in an attempt to stop the peso depreciation. The central bank of Argentina sold $450 million to $480 million at a price of 1,430 pesos per dollar. The Argentine government sold an estimated $850 million to support the peso last Tuesday to Friday, after the Milei government spent $1.1 billion to support the peso before U.S. Treasury Secretary Bescent last month to provide financial aid and calm the market.
Bank of England Governor Andrew Bailey said in a speech scheduled to be delivered in Scotland late Monday that the UK should create an environment conducive to investment. Bailey will point out at the Global Investment Summit in Edinburgh that economies need to make breakthroughs in the so-called "universal technology" (GPT) sector to drive investment and productivity gains. Artificial intelligence (AI) is an example. “We have to look at the potential and risks of AI with a pragmatic and open attitude,” Bailey said, adding that he is optimistic about “opportunities for investment, innovation and growth.”
The Brazilian government issued an announcement on October 6 local time stating that Brazilian President Lula and US President Trump held a conference call on the same day. During the talks, Lula asked the United States to cancel the 40% tariffs imposed on Brazilian products, and Trump appointed Secretary of State Rubio to continue negotiations with Brazilian Vice President Alkine. The Brazilian government also said that Lula and Trump agreed to hold a face-to-face meeting as soon as possible, which may be in Malaysia. The two sides exchanged phone numbers to maintain direct lwcgm.cnmunication.
Related people revealed that Japan's Liberal Democratic Party President Takashi Saemi basically finalized the four important positions within the party on the 6th. The former economic security responsibility minister Kobayashi Takayuki served as the president of the government affairs investigation, Senator Orimura served as the president of the general affairs, and former National Public Security Chairman Keiji Koya served as the chairman of the election countermeasures. Former Prime Minister Taro Aso will be appointed as vice president, and former Abe faction's former political republication president Hinatomi Hagida KoichikoAs acting secretary-general. Wakashiki took office as prime minister and planned to let former Secretary-General Toshimaki Motegi become foreign minister, and former Motegi's former defense minister Minami Kihara served as chief of the official cabin. The Liberal Democratic Party will hold an extraordinary general affairs meeting on the 7th to decide on the personnel of the party’s senior leaders. After that, the four major positions in the Party will attend the press conference.
Invesco China Technology ETF (code CQQQ) once again led the U.S. exchange-traded funds investing in the country last week, with the inflow scale setting a single-day record on Monday. Data lwcgm.cnpiled by Bloomberg showed that the fund attracted $292 million last week, recording inflows for the sixth consecutive week, setting the longest record since the end of March.
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