Fed officials have different opinions, analysis of short-term trends of spot gold, silver, crude oil and foreign exchange on September 24

Global Market Review

1. European and American market trends

The three major U.S. stock index futures rose, Dow futures rose 0.17%, S&P 500 futures rose 0.23%, and Nasdaq futures rose 0.34%. The German DAX index fell 0.31%, the UK FTSE 100 index fell 0.21%, the French CAC40 index fell 0.57%, and the European Stoke 50 index fell 0.31%.

2. Market news interpretation

Fed officials have different opinions, and US Treasury yields fell across the board

⑴ During the European session on Wednesday, US Treasury yields fell across the board. ⑵ Analysts at Brown Brothers Harriman Bank said Fed Chairman Powell and Director Bauman on Tuesday provided a very different policy outlook. ⑶Bowman's remarks suggest that last week's rate cuts may be the beginning of a series of rate cuts. ⑷ Powell's position is more cautious. ⑸ The agency's senior market strategist believes that by the Federal Open Market xn--xm-6d1dw86k.committee (FOMC) meeting from December 9 to 10, the risk of the Federal Reserve turning to a more dovish is rising. ⑹ According to specific data, the yield on the 2-year US Treasury fell 0.7 basis points to 3.562%. ⑺The yield on the 10-year U.S. Treasury fell 1.4 basis points to 4.103%. ⑻The yield on the 30-year U.S. Treasury fell 1.7 basis points to 4.719%.

U.S. mortgage interest rates continue to decline

⑴ Data from the Mortgage Bankers Association shows that as mortgage interest rates further declined, the xn--xm-6d1dw86k.comprehensive index of the US mortgage market rose 0.6% to 388.3 in the week ending September 19. ⑵ Refinancing Index rose 0.8% to 1609.8, hitting a new high since 2022 and soaring 80.0% in the past four weeks. The proportion of refinancing loans in total applications rose to 60.2%, the highest level since January 2022. ⑶ Government refinancing index rose 5.3%, with the Department of Veterans Affairs (VA) increasing 14.7%, offsetting the Federal Housing Administration (FHA)'s 3.7% decline. ⑷ The purchase index rose slightly by 0.3% to 174.5 for the third consecutive week, with the conventional purchase index rising by 0.9%, making up for the 1.3% decline of the government purchase index. ⑸ The 30-year fixed interest rate and large mortgage rates fell by 5 basis points and 4 basis points to 6.34% and 6.44%, respectively, while the FHA rate remained unchanged at 6.14%. ⑹5/1 mixed adjustable interest rate mortgage (ARM) interest rates fell 12 basis points to 5.53%, but their share of total applications dropped from 12.9% to 8.9%

Rumors of the Trump administration's investment triggered lithium stocks, and the stock price of America Lithium soared

⑴ On Wednesday, the stock price of America Lithium, listed in the United States, rose by more than 70% before the market opened. ⑵ It is reported that this is affected by rumors that the Trump administration is seeking to acquire up to 10% of the xn--xm-6d1dw86k.company's equity. ⑶ This move is interpreted by the market as the Trump administration's further intervention in industries it believes are crucial to national security. ⑷The news xn--xm-6d1dw86k.comes as the Trump administration renegotiated with the xn--xm-6d1dw86k.company on a $2.26 billion loan. ⑸ The U.S. Department of Energy has previously approved loans to its lithium mine project in ThackerPass. ⑹The project will be put into production in 2028 and is expected to become the largest lithium mineral in the Western Hemisphere by then. ⑺The project is also seen as a key move to reduce the U.S. dependence on major lithium processors. ⑻The news not only boosted the stock price of Lithium in America, but also led to the rise of other lithium mining xn--xm-6d1dw86k.companies. ⑼ Among them, Albemarle's share price rose 5.2%, and SigmaLithium's share price rose 5.3%. ⑽It is worth noting that America's Lithium's net loss in the second quarter almost doubled year-on-year.

Germany 7-year treasury bonds were successfully issued, with an average yield rising slightly

⑴ German Federal Bank announced that it successfully issued 2.50% of 7-year treasury bonds on Wednesday. The average yield of this auction was 2.52%, higher than the previous 2.46%, showing market demand for German government bonds. ⑵ Judging from the subscription multiple, the bid multiple of this auction is 1.5, higher than the previous 1.2. This shows that investors' willingness to subscribe to Germany's seven-year government bonds has increased and subscription demand has improved. ⑶ Although the yield on government bonds has risen slightly, the higher bid multiple reflects the good market demand for German government bonds. Under the current market environment, as the core economy of the euro zone, Germany's government bond assets are still regarded as a relatively safe investment option.

Hamburg, Germany issued bonds with the aim of expanding financing

⑴Hamburg, Germany (rated as Fitch AAA stable) has authorized several financial institutionsAs the lead administrator of its upcoming euro bonds. ⑵The transaction will issue an additional 250 million euros to supplement its existing bonds due in June 2035. ⑶The transaction will be launched in the near future if market conditions permit. ⑷ The target market of this bond includes retail investors, qualified counterparties and professional customers.

The energy giant's transaction adds a new chapter, with the Norwegian sovereign fund investing in German power grids for US$5.3 billion

⑴ The investment management agency of the Norwegian central bank agreed to acquire 21.8% of the shares of German transmission system operator TenneT Germany for a price of 4.5 billion euros (approximately US$5.32 billion). ⑵ The institution is a branch of the Norwegian central bank, which manages the country's sovereign wealth fund of up to $2 trillion. ⑶ This investment was conducted in conjunction with Dutch pension service provider APG and Singapore’s sovereign wealth fund GIC. ⑷The three investors will hold a total of 46% of TenneT Germany. ⑸After the transaction is xn--xm-6d1dw86k.completed, TenneTHolding, wholly owned by the Dutch government, will still be the major shareholder of TenneTGermany. ⑹TenneTGermany operates Germany's largest power transmission system, with its high-voltage transmission line length of about 14,000 kilometers. ⑺The investment management agency of the Norwegian central bank said the investment aims to fund the energy transformation and help promote grid expansion and transport renewable energy power to major demand centers. ⑻The agency's global head of energy and infrastructure said TenneTGermany's transmission grid is crucial to delivering renewable energy to demand from Europe's largest economy.

German business prosperity declined unexpectedly, euro zone bond yields fell

⑴ Data released on Wednesday showed that Germany's September business prosperity index unexpectedly fell from 88.9 after correction in August to 87.7, and xn--xm-6d1dw86k.companies' current operating conditions and future expectations were significantly worse. This led to a moderate decline in bond yields in the euro zone, with Germany's 10-year Treasury yield falling by nearly 2 basis points to 2.733%, and the 30-year Treasury yield also fell by about 2 basis points to 3.327%. The yields of bonds in countries such as France and Italy are also consistent with the trend of German government bonds. ⑵ U.S. Treasury yields also fell, with the 10-year Treasury yield and the 30-year Treasury yields falling to 4.102% and 4.714% respectively. The market currently seems to be more concerned about the Fed's future policy path. Some institutional analysts said that although Germany's weak business prosperity is a short-term factor, the large issuance of sovereign debt in the future may push up long-term yields. ⑶ Institutions pointed out that the volatility of long-term euro zone government bonds (especially 30-year bonds) is still high, reflecting the uncertainty of global long-term debt and the impact of Dutch pension reform. In addition, after a speech by Fed Chairman Powell on Tuesday, the money market currently expects the Fed to cut interest rates by 25 basis points next month at a 94% chance. ⑷ Market focus is now turning to Italian Treasury auctions later this week, and the US individuals to be announced on FridayConsumer spending price data, investors will look for clues to the Fed's future policy path.

The inflation outlook for the UK has improved, and expectations of a rate cut in the Bank of England have heated up. Institutional reports show that BoE chief economist Peel is more optimistic about the inflation outlook for the UK. ⑵ This is different from what he thought earlier this year, after he had previously been opposed to rate cuts. ⑶ This shift may mean that Pierre will vote for a rate cut, as early as the fourth quarter of this year, or the first quarter of 2026. ⑷ Current market data show that by December this year, the probability of the Bank of England cutting interest rates to 3.75% is 31%. ⑸ By February next year, the possibility of a rate cut to 3.75% will rise to 67%. ⑹The Bank of England predicts that the Consumer Price Index (CPI) will peak at 4% in September, following the previous inflation data of 3.8% in July and August.

The Japanese Ministry of Finance proposed to reduce the issuance of long-term government bonds

⑴ The Japanese Ministry of Finance said on Wednesday that it plans to lower the issuance of long-term Japanese government bonds in the bid for enhanced liquidity. ⑵ According to the published document, the proposal involves non-benchmark government bonds with a remaining term of 15.5 to 39 years, and the single issuance is planned to be reduced from the current 350 billion yen to 250 billion yen (about 1.69 billion US dollars). ⑶ This move reflects the considerations of the fiscal authorities in optimizing debt structure and market liquidity management.

3. Trends of major currency pairs in the New York Stock Exchange before the market

Euro/USD: As of 20:23 Beijing time, the euro/USD fell and is now at 1.1756, a drop of 0.51%. Before the New York Stock Exchange, the (Euro-USD) price fell on the last trading day, showing negative signals on the relative strength indicator, exceeding its EMA50 support, putting it under pressure and reducing its chances of recent recovery, and the opportunity for its stability under the support of the major bullish trend line in the short term remains as a final attempt to get the positive momentum needed to recover.

GBP/USD: As of 20:23 Beijing time, GBP/USD fell and is now at 1.3470, a drop of 0.41%. Before the New York Stock Exchange, (GBPUSD) price experienced a tense sideways trading in yesterday's trading, trying to get positive momentum that could help it recover and rise again, with the main bullish trend dominating on a short-term basis and trading along the slash, with positive signals on the relative strength indicators, which opened the way for more upward trends in the near future after unloading its overbought conditions.

Spot gold: As of 20:23 Beijing time, spot gold rose, now at 3770.56, an increase of 0.18%. Before the New York Stock Exchange, the price of (gold) fell slightly on the last trading day, attempting to gain bullish momentum, which may help it resume strong gains in the near term, with positive overlapping signals starting to appear in relative strength indicators, opening the way for new all-time highs, with the main bullish trend dominating in the short term and trading along the trend line.

Spot silver: As of 20:23 Beijing time, spot silver rose, now at 44.116, an increase of 0.23%. Before the New York Stock Market, the (silver) price fluctuated in the last intraday trading, with a major bullish trend dominating on a short-term basis and trading along the trend line, and positive pressure from trading above the EMA50 continues to exist in an attempt to obtain positive momentum that may help it recover and rise, accompanied by positive signals on the relative strength indicators, which opens the way to achieve more gains in the xn--xm-6d1dw86k.coming period after unloading its overbought conditions.

Crude oil market: As of 20:23 Beijing time, U.S. oil rose, now at 64.260, an increase of 1.34%. Before the New York Stock Exchange, the (crude oil) price consolidated its gains in the last day trading, supporting it to continue trading above the EMA50. On the other hand, under the leadership of the strong intraday bull market, we noticed negative signals on the relative strength indicators, indicating that the positive momentum has faded, which has witnessed some correctional rebounds.

4. Institutional View

Barclays: It is recommended that the RBI lower interest rates in October

⑴ Barclays believes that the RBI should cut interest rates by 25 basis points at the policy meeting next week (October 1), rather than waiting for December to take action. ⑵ The bank pointed out that the recent tightening of the financial environment, coupled with the impact of tariffs, has put pressure on the growth prospects in the next 12 months, which should encourage the central bank to relax its policies as soon as possible. ⑶ Barclays economists said that monetary policy formulation should pay more attention to growth performance in the next year. There is currently no urgent inflationary pressure, which will also become an important consideration in determining terminal interest rates. ⑷ Barclays expects inflation forecasts to be lowered, but growth forecasts will not be adjusted for the time being, although there are still upward risks.

The above content is about "[XM Foreign Exchange Market Analysis]: Fed officials have different opinions, analysis of short-term trends of spot gold, silver, crude oil, and foreign exchange on September 24". It was carefully xn--xm-6d1dw86k.compiled and edited by the XM Foreign Exchange editor. I hope it will be helpful to your trading! Thanks for the support!

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