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Hello everyone, today XM Forex will bring you "[XM Group]: Unprecedented internal differences in the Federal Reserve, analysis of short-term trends of spot gold, silver, crude oil and foreign exchange on December 3". Hope this helps you! The original content is as follows:
The three major U.S. stock index futures all rose, with the Dow futures rising 0.23%, the S&P 500 futures rising 0.20%, and the Nasdaq futures rising 0.18%. Germany's DAX index rose 0.23%, Britain's FTSE 100 index fell 0.13%, France's CAC 40 index rose 0.02%, and Europe's Stoxx 50 index rose 0.34%.
⑴ Despite obvious differences within the Federal Reserve, market analysts believe that dovish officials may still get enough votes to push for an interest rate cut at the December policy meeting. The move is intended to proactively manage downside risks, particularly in response to a cooling labor market. ⑵ Current pricing in the money market shows that traders expect an 84% probability of a rate cut in December. Although this implies that a rate cut is almost certain, given the significant differences within the Federal Open Market www.xmasseuse.committee (FOMC), this meeting may become the largest vote against policy action since the early 1990s, with four or more dissenting votes expected. ⑶ Since the October meeting, the most critical signal has www.xmasseuse.come from New York Fed President John Williams, whose remarks clearly put an interest rate cut in December back on the agenda. At the time of his speech, the market was pricing in a December interest rate cut of less than 30%, so this statement was seen as a correction to the overly hawkish market pricing after the October meeting, further strengthening the central bank's stance toward interest rate cuts. ⑷ For the US dollar, its downside risk increases before the meeting resolution. This windRisks rose further after Trump suggested he would nominate National Economic Council Director Kevin Hassett as the next Fed chair. The market believes that Hassett's interest rate stance is more inclined to match Trump's wishes and will therefore be more dovish than current Chairman Powell.
⑴ U.S. mortgage interest rates have fallen recently, bringing positive signals to the housing market. Data from the Mortgage Bankers Association (MBA) shows that in the week ending November 28, the average contract interest rate on 30-year fixed mortgages fell 8 basis points to 6.32%, a one-month low; during the same period, the interest rate on adjustable-rate mortgages (ARM) also fell to 5.4%, a new low since May 2023. ⑵ The decline in interest rates has stimulated a significant rebound in home buying activities. The MBA home purchase loan application index increased by 2.5% for the week, reaching the highest level since early 2023. This suggests that underlying demand in the housing market remains solid despite the affordability challenges posed by the high house prices and interest rate environment. However, the index of refinancing activity fell for the fifth consecutive week, reflecting the limited attractiveness of current interest rate levels for existing borrowers to refinance.
⑴ The British Debt Management Office successfully auctioned 4.75 billion pounds of 3-year Treasury bonds on Wednesday, and market demand performed well. ⑵The average yield of bonds in this auction is 3.855%, which is only 0.2 basis points higher than the market asking yield at the time of bidding deadline. ⑶The total amount of bids reached 14.7305 billion pounds, and the bid multiple (coverage rate) was 3.10 times, showing strong subscription demand. ⑷The tail spread of the auction is very small, only 0.3 basis points, which shows that the final issuance pricing is highly close to market expectations and the auction process is efficient and smooth.
⑴ The Japanese government bond market resumed selling on Wednesday, mainly due to weaker-than-expected results of the Bank of Japan's bond purchase operations and caution about Thursday's 30-year government bond auction. ⑵ The yields of key varieties rose sharply. The 30-year yield once climbed 4.5 basis points to a record high of 3.425%; the 10-year yield rose 3.5 basis points to 1.890%, the highest level since June 2008. ⑶ The yield curve steepened significantly. In the afternoon, the results of central bank bond purchases of 10- to 25-year bonds were weaker than expected, intensifying the selling pressure on the long end of the curve. ⑷ Japanese brokerage traders believe that given that the 10-year yield has easily exceeded 1.80% and is approaching 1.90%, the possibility of the yield hitting 2% has www.xmasseuse.come into view before the Bank of Japan meeting on December 18-19. ⑸ Market capital flows show that some regional accounts sold old bonds and bought new 10-year bonds. The overall transaction volume was light. ⑹ The market is paying close attention to the results of Thursday's 30-year Treasury bond auction, which will continue to test the bottom line of demand for long-term bonds.
On the 3rd local time, Hungarian Foreign Minister Peter Szijjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjj for sale stated in Brussels that Hungary will not be able to accept and implement the EU’s decision to phase out energy imports from Russia. Without Russian energy supplies, Hungary's energy supplies cannot be guaranteed. Szijjártó also said that Hungary will initiate legal proceedings against the decision, and that Hungary and Slovakia will jointly file a lawsuit in the Court of Justice of the European Union.
⑴ The European Central Bank has formally requested the Italian government to reconsider a proposal involving the national gold reserve. The proposal was put forward by some members of the center-right party of Italian Prime Minister Meloni, and plans to clearly declare the approximately 2,452 tons of gold held by the Bank of Italy (the third largest reserve in the world) as property "belonging to the Italian people". ⑵ The European Central Bank pointed out in its opinion that the specific purpose of the draft provisions is not yet clear and may affect the independence of the Bank of Italy in performing its basic responsibilities within the European Central Bank system. The European Central Bank recommended that the Italian authorities reconsider the relevant provisions. Analysts believe that if the proposal is passed, it could theoretically pave the way for the Italian government to sell part of its gold reserves in the future. Gold prices are currently at historically high levels, but the ECB's stance shows concern about the independence of member states' central banks and the stability of the euro system.
The leader of the British Reform Party, Nigel Farage, has publicly denied reports that he is negotiating an electoral alliance with the Conservative Party. He refuted such claims as "wrong" and "ridiculous" and criticized the Conservative Party's tenure as being filled with "deception and lies". Farage made it clear that the Reform Party will not only not cooperate with the Conservative Party, but also plans to www.xmasseuse.completely weaken the Conservative Party’s status as a national party through local elections next May. The Financial Times previously reported that Farage may seek an agreement with the Conservative Party, but this was directly refuted by him.
⑴The German 10-year government bond yield hit 2.768% on Tuesday, a two-and-a-half-month high since late September, and remained stable at around 2.75% on Wednesday. ⑵ The market focus turns to the outside world. On the one hand, it focuses on the U.S. private sector employment data to be released later on Wednesday to judge the Fed's policy path. ⑶On the other hand, the market is digesting the impact of Japanese government bond yields rising to multi-year highs, but Japanese bond market volatility eased slightly on Wednesday, alleviating European investors' concerns about spillover effects. ⑷Despite data showing that business activity in the euro zone expanded at the fastest pace in two and a half years in November, the bond market's reaction was muted. ⑸The key factor supporting high yields is inflation. The euro zone's initial annual inflation rate in November rose to 2.2%, and service sector inflation heated up to 3.5%. ⑹ Analysts at Société Générale pointed out that this strengthened the European Central Bank's "hawkish stance" at the meeting in two weeks."The inevitability of maintaining interest rates unchanged but conveying a hawkish stance. ⑺ However, given that the market generally believes that the European Central Bank has no risk of raising interest rates in the next 6-12 months, the hawkish repricing of medium-term policy and the spillover impact on long-term bonds may be nearing an end. ⑻ ECB officials have recently emphasized that inflation is close to the 2% target, and there is a lag in the transmission of monetary policy, which has a negative impact on the expected short-term An aggressive response to volatility may be counterproductive. ⑼ In terms of other major bonds, France's 10-year yield remained steady at 3.49%, Italy's 10-year yield fell slightly to 3.45%, and its spread with German government bonds remained at 70 basis points.
⑴Switzerland 11 The monthly inflation rate unexpectedly slowed by 0.1 percentage points to 0%, the lowest level since May and at the lower end of the SNB's 0%-2% price stability target range. (2) Despite the lower inflation data, economists generally expect the SNB to keep its benchmark interest rate unchanged at 0% next week and throughout 2026, rather than reintroducing negative interest rates. Sarasin Bank economist Karsten Junius believes that there is no need to adjust monetary policy at the moment. ⑷Economiesuisse chief economist Rudolf Minsch also expects interest rates to remain unchanged and predicts that Swiss inflation will rise to around 0.4% in 2026. ⑸Rudolf Minsch is strong. Negative interest rate policy will have adverse side effects and will only be used when absolutely necessary, and this necessity is not currently seen. ⑹ UBS economist Alessandro Bee also predicts that zero interest rates will be maintained until 2026, citing the expectation that rising wages will lead to a slight increase in inflation next year. He also expressed his expectation that inflation will rise in the future and can tolerate it being temporarily below 0%.
EUR/USD: As of 21:20 Beijing time, EUR/USD rose and is currently at 1.1674, an increase of 0.46%. EUR/USD has rallied in recent intraday trade ahead of the New York session, successfully breaking through the important resistance level of 1.1650, our previous price target. This www.xmasseuse.comes as the pair moves along a short-term corrective uptrend line, supported by continued positive momentum trading above the 50-day SMA. However, we also note that the RSI indicator has reached extremely overbought levels, which may limit the pair’s upcoming gains.
GBP/USD: As of 21:20 Beijing time, GBP/USD has risen and is now at 1.3314, an increase of 0.77%. Before the New York session, the GBPUSD used its reliance on the EMA50, coupled with its reliance on the bullish corrective trendline in the short term, to gain new bullish momentum after testing the key support at 1.3195, helping it recover and rise again. In addition, the relative strength indicator showed positive signals, supporting the scenario of consolidating gains in the period ahead.
Spot gold: As of 21:20 Beijing time, spot gold has risen and is currently trading at 4219.54, an increase of 0.33%. Gold fell in the latest intraday trade before the New York market opened, as the RSI indicator started to show negative signals after reaching overbought levels. Meanwhile, the price is trying to gain positive momentum, which may help it break above the key and stubborn resistance level of $4,225, which is supported by the continued dynamic strength of trading above the 50-day SMA, which reinforces the dominance of the short-term uptrend, especially with the movement of the ascending trend line.
Spot silver: As of 21:20 Beijing time, spot silver has risen, now trading at 58.769, an increase of 0.59%. After holding key resistance at $58.80 before the New York session, silver has fallen in recent intraday trading as prices attempt to gain positive momentum that could help break this resistance. At the same time, silver is trying to ease its apparent overbought saturation on the RSI indicator, especially with the influx of negative signals. This is dominated by a major short-term uptrend, with price moving along major and minor trend lines that support this path.
Crude oil market: As of 21:20 Beijing time, U.S. oil rose, currently trading at 59.420, an increase of 1.33%. Before the New York market opened, crude oil surged sharply in the latest intraday trading, successfully getting rid of the negative pressure on the 50-day moving average. After reaching the oversold zone, the RSI indicator showed a positive signal. This move sets the price on a new short-term upward path along the support trendline.
1. Barclays Bank strategist Jonathan Hill pointed out in the latest report that it is expected that by 2026, the market's pricing of U.S. inflation-protected bonds (TIPS) will gradually reflect a higher inflation risk premium. Markets are currently priced at or below levels consistent with the Fed's 2% inflation target, with little in the way of a positive inflation risk premium.
2. Hill said that Barclays’ preferred trading strategy for this trend is to go long the 10-year breakeven inflation rate. He emphasized: "Although there are several potential catalytic factors worthy of attention in the future, there is a clear lack of premium www.xmasseuse.compensation for the upward risk of inflation in current market pricing, so we believe that it is reasonable to be long the break-even inflation rate." This view reflects the bank's judgment that medium- and long-term inflation expectations may rise.
1. Metzler Bank analyst Leon Ferdinand Bost pointed out in the latest report that the euro zone government bond yield curve is expected to show a steepening trend. The current European Central Bank's final interest rate implied by the yield on German two-year government bonds is about 2%, but the bank believes that the market may have underestimated the possibility of further interest rate cuts by the European Central Bank because its assessment of economic growth and inflation risks is biased to the downside.
2. At the same time, driven by Germany’s fiscal plan, the 10-year German government bond yield is expected to face upward pressure from the second quarter of 2026, and may rise to 2.80% by the end of 2026. The forecast is only slightly higher than Tuesday's closing level of 2.749%. Metzler Bank expects the 10-year Bund yield to remain at about 2.50% in the first quarter of 2026, before gradually rising, partly due to possible interest rate cuts by the European Central Bank.
The above content is all about "[XM Group]: Unprecedented disagreements within the Federal Reserve, analysis of short-term trend of spot gold, silver, crude oil, and foreign exchange on December 3". It was carefully www.xmasseuse.compiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading! Thanks for the support!
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