The Federal Reserve is hawkish, analyzing the short-term trends of spot gold, silver, crude oil and foreign exchange on October 30

Global market overview

1. European and American market conditions

The three major futures all fell, with the Dow futures falling 0.33%, the S&P 500 futures falling 0.17%, and the Nasdaq futures falling 0.20%. Most European stocks fell, with Germany's DAX30 index rising by 0.29%, Britain's FTSE 100 index falling by 0.28%, France's CAC40 index falling by 0.34%, Europe's Stoxx 50 index rising by 0.01%, Spain's IBEX35 index falling by 0.34%, and Italy's FTSE MIB index falling by 0.23%.

2. Interpretation of market news

The Fed is hawkish, and Central and Eastern European currencies are collectively "soft"

⑴ Institutional quotations show that the Hungarian forint fell 0.2% to 388.50 against the US dollar at 18:52 Beijing time on Thursday, still one step away from the 16-month high hit in early October. ⑵ The Czech koruna fell slightly by 0.05% to 24.35, continuing to hover near its high in more than two years; the Polish zloty fell by 0.1% to 4.2440, and the National Development Bank BGK predicted a short-term range of 4.23-4.25. ⑶ING pointed out that after the Federal Reserve cut interest rates on Wednesday, Powell was hawkish, ending risk sentiment. The strength of the U.S. dollar against the euro made the forint and zloty, which had been crowded and long, bear the brunt. ⑷The Hungarian Statistics Office announced that GDP in the third quarter was lower than expected, and stubborn inflation forced the central bank to maintain the European Union's joint-highest benchmark interest rate at 6.5%; Czech data on the same day showed that domestic demand and wage growth drove the economy to exceed expectations. Capital Economics said this will further strengthen the hawkish stance of the Czech central bank, and regional interest rate differences may serve as a cushion for the foreign exchange market.

British debt’s heartbeat is racing, 11The monthly budget becomes a "detonator"

⑴ ING strategists pointed out that British bonds are much more sensitive to risk sentiment than German bonds. If the November 26 budget disappoints in terms of fiscal sustainability, gilt yields may rise sharply. ⑵Potential "thunder step" www.xm-forex.combinations include: increased spending, new debt issuance and inflationary tax increases, any of which may trigger an instant loss of market confidence in the UK's finances. ⑶ Data shows that the 10-year British bond yield has risen by 4 basis points to 4.436%. The most vulnerable part of the curve is the first to reflect anxiety, and short-term volatility is expected to remain high.

LME plans to introduce permanent rules to restrict large positions in front-month contracts

⑴ The London Metal Exchange (LME) said on Thursday that it plans to formulate permanent rules to impose restrictions on members holding large positions in front-month contracts when inventory levels are low. ⑵ In June this year, the LME implemented temporary restrictions after the premium of the front-month copper contract soared. The LME said the measures were introduced in response to a low inventory environment and recent problems with excessive contract holdings, which prompted the LME Special www.xm-forex.committee to instruct market participants to reduce large positions on the exchange. Lately, premiums on front-month zinc contracts have surged to record highs as inventories have fallen by about 85% since the start of the year. ⑶LME said in a statement: "We believe that the development of a permanent rule that applies to the entire market to deal with market participants holding significant positions in front-month contracts is the most appropriate measure to maintain an orderly market."

Interest rate cut expectations freeze the rupee to record lows Only 6 basis points

⑴ Traders sharply reduced bets on the Federal Reserve's December interest rate cut on Thursday. The Indian rupee fell 0.6% against the US dollar to 88.7437, the largest single-day drop since August 29, and only 6 basis points away from the historical low of 88.8050 in September. ⑵Informed sources said that the Reserve Bank of India sold US dollars to hold the level earlier this month, but there was no obvious intervention in the spot market on Thursday, and short sellers took advantage of the situation to increase their positions. ⑶The financial director of Finrex Treasury Advisors pointed out that Asian currencies are generally under pressure, and the absence of the central bank has caused the rupee to be "the most injured". If it breaks the record, it may go straight to 89.50. ⑷ Kotak Securities analysts warned that once 88.8050 falls, the next target will be the psychological level of 90, and short-term option obstacles may trigger an acceleration slide.

The cooling of tariffs turned out to be the killer of oil prices, with three consecutive monthly declines in October

⑴ Institutional quotations showed that Brent crude oil fell 0.65% to US$64.50 at 19:36 Beijing time on Thursday, and US crude oil fell 0.63% to US$60.10, www.xm-forex.completely giving up Wednesday's huge destocking gains during the session. ⑵ U.S. crude oil inventories plummeted by 6.86 million barrels on Wednesday to 416 million barrels, far exceeding expectations by 210,000 barrels. It is still difficult to www.xm-forex.compete with trade sentiment. ⑶The White House confirmed Trump’s tariff remarks and lowered China’s tax rate by 10 percentage points to 47% in exchange for China’s resumption of U.S. soybean purchases and rare earth circulation. PVM pointed out that the market only regarded it as an end to the conflict rather than an icebreaker. ⑷The Federal Reserve cut interest rates by 25 basis points on Wednesday but hinted that it may stop doing so during the year, Rystad said its policy shift will provide tail support for www.xm-forex.commodity demand, but investors are paying more attention to the OPEC+ meeting on November 2, which is expected to increase production by another 137,000 barrels per day. ⑸If the meeting confirms the increase in production, the two major indicators that have fallen by more than 3% in October will record three consecutive negative days, and technical selling pressure may accelerate the test of the psychological level of $60.

As the yen shows weakness, Japanese automakers' "importing" American-made cars to save the market has full symbolic significance

⑴ Toyota and Nissan have stated this week that they are "researching" and "seriously considering" returning American factory vehicles to Japan. The purpose is not to make a profit, but to show their cooperation in reducing the trade surplus. ⑵ The industry estimates that the annual scale is only about 20,000 vehicles. www.xm-forex.compared with last year, Japan exported nearly 1.4 million vehicles to the United States, and the United States had a deficit of US$68.5 billion with Japan, which is a drop in the bucket. ⑶ American-standard cars have left-hand drive, large size, and different safety standards. The government needs to coordinate standards and modify the right-hand drive. Cost and time are the biggest obstacles. ⑷ Data from the Japan Automobile Manufacturers Association shows that the domestic production of Japanese brands in the United States will reach 3.3 million vehicles in 2024, far exceeding the resale plan. Localized production is still the main track. ⑸ Analysts bluntly said that this move has "huge symbolic significance" and is intended to express goodwill to Trump's tariff remarks and maintain Japan-US relations. In the short term, the market will focus on whether the Tokyo government will quickly introduce a standard mutual recognition plan.

Seven suspects in the Louvre robbery were arrested, and 8 pieces of jewelry are still missing

On October 30, local time, Paris prosecutor Laure Beccuau said that on the evening of the 29th, five suspects in the Louvre robbery were arrested, including a major suspect who had been previously targeted. It is understood that the arrests were carried out simultaneously in multiple locations in Paris and surrounding areas at approximately 21:00 on the evening of the 29th. Previously, two suspects had been arrested on the 25th. The Paris prosecutor said on the 29th that the two people would be formally prosecuted and temporarily detained. So far, a total of seven suspects have been arrested in the Louvre robbery case. At around 9:30 on October 19, a robbery occurred in the Louvre Museum. Within a few minutes, several masked men stole nine pieces of "inestimable value" jewelry, including necklaces, brooches, earrings, etc. from the Napoleonic period. The Louvre Museum was immediately evacuated and closed. The suspect abandoned a tiara belonging to Queen Eugénie while fleeing. At present, the crown has been found by the police, and the whereabouts of the remaining eight pieces of jewelry are still unknown. At 9:00 on the 22nd, three days after the robbery incident, the Louvre reopened its doors for tourists to visit.

Germany, Italy stalled, France and Spain surged, and Europe's Q3 thrillingly outperformed

⑴Eurostat announced on Thursday that the euro zone's GDP increased by 0.2% quarter-on-quarter in the third quarter. A Reuters survey estimated that it was only 0.1%, equivalent to an annual rate of 1.3%, which was higher than the expected 1.2%. ⑵ Spain maintained its lead with an increase of 0.6% month-on-month, France expanded by 0.5%, far exceeding the forecast of 0.2%, and Germany and Italy both experienced zero growth, becoming the biggest drag. ⑶The unemployment rate remained stable at 6.3% in September, close to a historical low, reducing the pressure on the European Central Bank to cut interest rates in the short term. ⑷ Germany has almost stagnated in the past three years, and large-scale government spending has not yet been implemented. S&P Global warned of a resumption in the fourth quarter.The Soviet Union's kinetic energy is still weak, and Ifo and PMI are only showing signs of recovery. ⑸ Institutions generally expect that low inventories, interest rate transmission, household savings, and reduced tariff uncertainty will drive a moderate recovery in future growth. However, structural rigidity limits the upside, and the long-term range is locked at 1.2%-1.5%.

Diesel premium soared to US$25.75, and Singapore inventories hit a 13-week low

⑴ Institutional data showed that the 10ppm diesel cracking spread held at a high of US$25.75/barrel at the Asian closing price on Thursday. Tight supply in recent months has made backwardation wider again. ⑵Singapore's middle distillate inventories fell to 8.52 million barrels, a 13-week low, as net exports increased and regional spot prices tightened. ⑶ The U.S. Energy Information Administration simultaneously announced that U.S. distillate inventories unexpectedly dropped by 3.36 million barrels to 112.2 million barrels, far exceeding the expected drop of 1.74 million barrels. ⑷The price difference of jet fuel has simultaneously firmed up, but the amplitude is moderate. The regrade of diesel to jet fuel expanded to -1.25 cents/barrel, highlighting the strength of diesel. ⑸ There is zero transaction in the spot market, and traders have a strong wait-and-see attitude. The cracking of the high level may stimulate refineries to increase their operations, and the risk of short-term fluctuations will intensify.

France’s Q3 growth rate overwhelms Germany and Italy’s political storm, and it is difficult to stop the surge in aerospace exports

⑴ The French National Statistics Office announced on Thursday that GDP in the third quarter increased by 0.5% from the previous quarter, twice the 0.3% in the second quarter, easily beating the ceiling of the highest forecast of 0.3% by 26 institutions. ⑵ Exports surged by 2.2% and became the biggest engine. Among them, the aerospace industry's shipments exploded, and www.xm-forex.combined imports fell by 0.4%. Foreign trade alone contributed 0.9 percentage points, www.xm-forex.completely offsetting the 0.6 percentage point drag caused by inventory depletion. ⑶Business investment bucked the trend and expanded by 0.9%, offsetting the weakness in consumption which only increased by 0.1%. Officials said that www.xm-forex.companies were rushing to focus on shipping before the new round of Trump's tariff remarks. ⑷ Finance Minister Lesueur urgently urged parliament to pass the budget quickly, warning that if the amendment increases taxes by billions of euros, it will erode business confidence. ⑸ ING senior economists pointed out that business and consumer confidence recovered simultaneously in October, and the impact of political budget uncertainty on growth may be smaller than expected and may be delayed.

3. Trends of major currency pairs before the New York market opens

EUR/USD: As of 20:23 Beijing time, EUR/USD fell and is now at 1.1581, a decrease of 0.18%. Before the New York session, (EURUSD) price experienced choppy trading at its last intraday levels after rising in early trade in an attempt to alleviate some oversold conditions on the Relative Strength indicator, especially after a positive signal hit its EMA50 resistance, which brought intensifying downward pressure on it due to the dominance of the main bearish trend in the short term and the price trading along the trend line.

GBP/USD: As of 20:23 Beijing time, GBP/USD fell and is now at 1.3161, a decrease of 0.25%. New York marketPreviously, in the last intraday trade, (GBPUSD) price was cautiously rising after holding firm at the 1.3190 support level, which had been targeted in our previous analysis. The price is trying to recoup some of its previous losses and ease the oversold conditions evident on the RSI, especially in the face of positive signals, while the main bearish trend dominates in the short term and trades along support trend lines.

Spot gold: As of 20:23 Beijing time, spot gold has risen, now trading at 3973.53, an increase of 1.11%. In the last intraday trade before the New York session, (gold) prices rose, with the key support level at $3950 stabilizing, trying to eliminate oversold conditions on the relative strength indicator, especially in the case of positive signals, while continuing to be under pressure due to its price below the EMA50, which reduces the possibility of a price recovery in the short term, in the context of a dominant bearish correction trend in the short term.

Spot silver: As of 20:23 Beijing time, spot silver has risen, now trading at 47.980, an increase of 0.93%. The price of silver (silver) edged higher in pre-market trading in New York during the last intraday session, with downward pressure further exacerbated by continued negative pressure as it trades below the EMA50 amid a bearish correction trend that dominates the short term. On the other hand, we note a positive crossover on the Relative Strength Index, after it released its overbought condition, paving the way for more gains in the www.xm-forex.coming period.

Crude oil market: As of 20:23 Beijing time, U.S. oil fell, now trading at 60.010, a decrease of 0.73%. Prices (crude oil) have found some support in the recent intraday trade ahead of the New York session as it gained some bullish momentum relying on the support of the EMA50, which helped it realize gains, dominated by a short-term bullish correction trend. On the other hand, we noticed a negative signal on the relative strength indicator, which slowed the price rebound.

4. Institutional view

Institution: The market is disappointed by the Bank of Japan’s lack of hawkish tendencies; wait for Kazuo Ueda’s speech

1. Christopher Wong, a foreign exchange strategist at Oversea-Chinese Banking Corporation in Singapore, said that the market is disappointed by the Bank of Japan’s lack of hawkish tendencies, and yen bulls have left the market. Investors await Bank of Japan Governor Kazu Ueda’s announcementMen announced more details at the press conference, but the direction of normalization of the Bank of Japan's policy ultimately points to raising interest rates.

2. Policy differences between the Federal Reserve and the Bank of Japan should help support the downward trend in the USD/JPY exchange rate, although the Bank of Japan’s slow pace of policy normalization may disappoint investors who are short USD/JPY.

HSBC predicts: The next action of the Reserve Bank of Australia will be to raise interest rates in 2027

1. Paul Bloxham, chief economist of HSBC Australia, said that unexpectedly strong Australian third-quarter inflation data has www.xm-forex.completely changed the outlook for interest rates.

2. Core view: As the core inflation rate unexpectedly rose instead of falling back toward the midpoint of the target range, the Reserve Bank of Australia has no room to cut interest rates. The next interest rate adjustment is likely to be a rate hike in early 2027.

3. Inflation reversal: The core inflation rate rose again, deviating from the previously expected downward trajectory.

4. Stagnation of momentum: The process of fighting inflation has "completely stalled."

5. Policy shift: This change fundamentally changes the outlook for official interest rates, ruling out the possibility of a rate cut in the near future. This forecast suggests that markets may need to prepare for the RBA to maintain current high interest rates for several years.

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