Powell faces a key decision, analysis of short-term trend of spot gold, silver, crude oil and foreign exchange on November 25

Global market overview

1. European and American market conditions

The three major U.S. stock index futures all fell, with the Dow futures falling 0.08%, the S&P 500 futures falling 0.14%, and the Nasdaq futures falling 0.25%. Germany's DAX index fell 0.10%, Britain's FTSE 100 index rose 0.04%, France's CAC 40 index rose 0.16%, and the European Stoxx 50 index fell 0.11%.

2. Interpretation of market news

Powell is facing a key decision, and disagreements within the Federal Reserve have reached a peak

⑴ Policy disagreements within the Federal Reserve have reached the highest level in Powell’s nearly eight-year tenure. The decision to cut interest rates in December may trigger opposition from many members. ⑵ Powell faces two strategic choices: one is to pause after cutting interest rates as expected by the market and release a signal that "the threshold for subsequent interest rate cuts will be raised" through a statement; the other is to keep interest rates unchanged and make an evaluation after the data in January next year are xmniubi.complete. ⑶ The economic fundamentals show contradictory characteristics, with stagnant employment growth and high inflation coexisting, showing signs of stagflation. ⑷ Two of Powell's core allies have sent signals. New York Fed President Williams said "there is still room for further policy adjustments in the near future," and San Francisco Fed President Daley clearly supports an interest rate cut in December. ⑸ Members who oppose interest rate cuts are worried about the spread of inflationary pressure and believe that restrictive policies should be maintained. Boston Fed President Collins is "hesitant" to further cut interest rates. ⑹ Historical experience shows that since 1992, the Federal Reserve has not had a decision with more than three dissenting votes, and the degree of disagreement this time may break this record. ⑺The final decision will depend on Powell’s assessment of risks. IfChoosing to cut interest rates requires building a new consensus, while choosing to stay put may prolong internal disputes.

British bank performance exceeded expectations, and profit forecasts were raised across the board

⑴After HSBC, Barclays, Lloyds and NatWest released their third-quarter reports, almost all banks received consensus forecast increases. ⑵ According to S&P Global VisibleAlpha data, the net profit and net interest income forecasts of three of the four banks were revised upwards. ⑶ Analysts pointed out that structural hedging yields, solid domestic loan growth and improving non-interest income jointly supported the revenue guidance increase. ⑷Lloyds Bank is the only bank to experience a reduction in its net profit forecast, as its third-quarter profit fell 45% due to its provision of 800 million pounds in auto finance-related provisions. ⑸ NatWest Bank’s net profit forecast was raised by up to 6.5%, with analysts praising its “outstanding performance among its British peers.” ⑹ The overall performance of the banking industry shows that despite individual business challenges, core profitability continues to improve.

The Ukraine peace agreement achieved a breakthrough, and the United States and Russia held secret talks to follow up

⑴ U.S. officials confirmed that the Ukrainian delegation has reached agreement with the United States on the terms of a potential peace agreement. ⑵ U.S. Army Secretary Dan Driscoll held secret talks with the Russian delegation in Abu Dhabi on Monday. ⑶The purpose of this meeting is to follow up on the weekend consultations between Geneva and Ukraine and jointly promote the peace process. ⑷Although there are still a few details of the agreement that need to be improved, both parties have reached consensus on the overall framework. ⑸The amnesty clause has been removed from the latest version of the 19-point peace plan, showing that the negotiations have made substantial progress.

The U.S. bond market is waiting for a break, with key data and differences from the Federal Reserve dominating the trading logic

⑴Trading in the U.S. bond market was light overnight, with the 10-year yield fluctuating by less than 2 basis points, and trading volume was sluggish and mostly contract rollover operations. ⑵ It is expected that the ADP weekly data and the retail sales control group in September will activate the market, and this data will be directly included in GDP accounting. ⑶The trading strategy tends to sell on highs when the 10-year yield is close to 4%, and the ideal range is between 4.05% and 4.02%. ⑷ Famous economist Roubini supports the "long American exceptionalism" deal, believing that technological development will transcend the impact of tariffs, and predicts that the real GDP growth rate in the United States can reach 4%. ⑸ There are unusual differences within the Fed. Powell faces two options: suspend interest rates after cutting interest rates or maintain interest rates until January for re-evaluation. ⑹ San Francisco Fed President Daley rarely publicly supported an interest rate cut in December, emphasizing the fragility of the labor market and the risks of non-linear changes. ⑺ A number of data such as PPI, retail sales, and housing price index will be released intensively during the day. The market expects PPI to increase by 0.3% month-on-month in September, and retail sales to increase by 0.4%. ⑻The Ministry of Finance will conduct multiple bidding operations today, including US$70 billion in 5-year Treasury bonds and US$28 billion in 2-year floating-rate Treasury bonds.

The EU’s trade surplus with the United States continued to decline in the second and third quarters of this year

On November 25, local time, Eurostat released data showing that in the second and third quarters of this year, the European Union’s trade surplus with the United States continued to decline.The alliance's trade surplus with the United States has continued to decline. Data show that the EU's trade surplus with the United States in the third quarter of this year was 40.8 billion euros, a decrease of 13.3% from the 47.1 billion euros in the second quarter, and a sharp decrease from the 81.2 billion euros in the first quarter, a decrease of 49.7%. A xmniubi.communiqué issued by Eurostat stated that the surplus in the first quarter of this year was significant due to the significant increase in EU exports to the United States due to the impact of potential U.S. tariffs. Data also show that in the third quarter of this year, the EU achieved a trade surplus in categories such as chemicals and related products, machinery and vehicles, and food and beverages; it experienced a trade deficit in categories such as energy and raw materials.

Differences in Russia’s asset disposal plan put European long-term national debt under pressure

⑴ The disposal plan for Russia’s frozen assets in the Ukraine peace plan has attracted market attention, and the United States proposed that 50% of asset income should be used for aid to Ukraine. ⑵ Europe needs to bear an additional US$100 billion in reconstruction funds, which may increase Europe's unfinanced financial burden. ⑶ Analysts pointed out that this move will intensify the upward pressure on long-term European government bond yields and lead to a steepening of the yield curve. ⑷ The fiscal expansion policy has significantly increased the demand for funds. If the burden of reconstruction is superimposed, it may cause concerns about debt sustainability. ⑸ Citi analysts believe that the U.S. plan will be difficult to accept in Europe because most of the assets are stored in the European Bank for Clearing. ⑹The alternative may be to replace Russian assets with zero-coupon EU bonds that can be extended indefinitely, which will not increase the EU's financing needs. ⑺Despite differences, the latest developments have increased the possibility of the EU implementing the Russian asset use plan.

The European Bank has ample liquidity and credit demand continues to be sluggish

⑴ European Central Bank data showed on Tuesday that xmniubi.commercial banks borrowed 211 million euros through overnight lending facilities, a significant decrease from the 709 million euros the day before. ⑵ The use of overnight deposit instruments reached 2.51 trillion euros, continuing to grow from 2.50 trillion euros the day before. ⑶The current account holdings of xmniubi.commercial banks with the central bank were 163.943 billion euros, slightly lower than the 166.440 billion euros the day before. ⑷The decline in the size of overnight loans reflects ample liquidity in the inter-bank market and the weak credit demand has not changed. ⑸ The scale of deposits continues to run at a high level, indicating that the banking system's risk appetite is conservative and funds still tend to be deposited in the central bank. ⑹ The phenomenon of uneven liquidity distribution still exists, and a large amount of funds are deposited in the central bank's account and cannot be effectively transformed into credit growth.

The demand for Italian debt issuance is divided, and inflation-linked bonds are popular

⑴The Italian Ministry of Finance successfully issued 4.5 billion euros of government bonds on Tuesday, including traditional bonds and inflation-linked bonds. ⑵The yield rate of traditional bond issuance due in August 2027 is 2.18%, an increase of 0.03 percentage points from the October auction, and the bidding coverage rate is 1.64, which is lower than the previous time. ⑶Inflation-linked bonds due in August 2031 performed strongly, with an issuance yield of 1.08%, a decrease of 0.09 percentage points from the September auction, and a bid coverage rate of 1.80, the highest this time. ⑷The issuance yield of ultra-long-term inflation-linked bonds due in May 2039 is 2.00%, a decrease of 0.0% from the previous time.13 percentage points, and the bid coverage rate is 1.62. ⑸The auction results show that investors have strong demand for inflation-linked bonds, especially the yields of medium and long-term varieties have dropped significantly. ⑹ The demand for traditional short-term bonds is relatively weak, reflecting the market’s cautious attitude towards recent policy risks and interest rate trends. ⑺ This bond issuance successfully alleviated liquidity pressure, but the difference in performance of bonds of different maturities revealed the market's repricing of the inflation outlook and maturity preference.

Confidence in France is temporarily stable, but fiscal austerity lurks risks

⑴ Institutional data show that French consumer confidence remained basically stable in November, and the overall performance stabilized. ⑵ Specifically, people's concerns about unemployment have eased slightly, but the absolute level remains relatively high. ⑶ xmniubi.compared with the turbulent period in the summer, the recent stabilization of the political environment has provided important support for consumer confidence. ⑷But looking to the future, risk factors are accumulating, and the government may launch xmniubi.comprehensive tax increases to consolidate public finances. ⑸ Analysts clearly pointed out that once the fiscal austerity policy is implemented, it will directly suppress consumer sentiment. ⑹ The current stable pattern may be broken, and the future trend of consumer confidence will depend on the outcome of the game between fiscal policy and employment conditions.

Risks in the Hungarian real estate market are accumulating, and the resilience of the banking industry is facing a test

⑴The Central Bank of Hungary pointed out in the financial stability report that risks in the real estate market are continuing to increase. ⑵ Despite potential risks, the country’s banking industry will maintain sufficient liquidity and strong capital position in the first half of 2025. ⑶The asset quality of the banking industry performs well, and the non-performing loan ratio is at a historically low level. ⑷The central bank assessed that no signs of systemic liquidity risks have been found so far. ⑸ The stress test results show that the Hungarian banking system has high risk absorption capacity. ⑹ The current situation presents a xmniubi.complex situation in which risks and resilience coexist. The rising risks in the real estate market are in sharp contrast with the solid fundamentals of the banking industry. ⑺Investors need to pay attention to the possibility of risk transmission. Although the banking industry currently has sufficient buffer space, they need to be alert to the potential impact of the continued accumulation of real estate risks on financial stability.

The issuance of local bonds in India has been sluggish, and there is a mystery behind the insufficient financing of 14 states

⑴ 14 Indian states raised 250.67 billion rupees through loans on Tuesday, lower than the original financing target of 265.5 billion rupees. ⑵ There was a funding gap of 14.83 billion rupees in this issuance, with a xmniubi.completion rate of approximately 94.4%, indicating that market demand did not meet expectations. ⑶The bond bidding interest rates of various states show obvious differences, with the highest in Bihar at 7.46% and the lowest in Uttarakhand at 7.06%. ⑷The yield curves of bonds of different maturities are clear. The interest rate of 4-year bonds in Rajasthan is 6.56%, while the interest rate of 30-year bonds in Tamil Nadu reaches 7.44%. ⑸ The pricing of long-term bonds in key states has attracted attention, and the winning interest rate for Chhattisgarh's 10-year bonds was determined at 7.19%. ⑹ The implied yield of each state further reveals market pricing. The implied yield of SDL in Chhattisgarh in 2040 is 7.34%, which is 7.4500%. ⑺Some states accept part of the allocation amount, ChhattisgarhReceived a partial allocation of Rs 500 crore in the 10-year variety. ⑻Punjab received a partial allocation of Rs 517.202 million in 8-year bonds, reflecting investor preference for specific maturities. ⑼ The results of this issuance imply that the local government bond market is under pressure, and investors have shown greater selectivity in term and region selection. ⑽ The differences in bid-winning interest rates may reflect the market’s different assessments of each state’s financial situation and credit risk.

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

EUR/USD: As of 21:20 Beijing time, EUR/USD rose and is now at 1.1554, an increase of 0.28%. Before the New York market opened, the price of (EURUSD) rose sharply in the last day's trading, and a positive overlay signal appeared on the relative strength indicator, impacting the slightly bearish trend line in the short term, while the negative pressure on EMA50 still formed an obstacle, hindering the price's attempts to rebound in the future.

GBP/USD: As of 21:20 Beijing time, GBP/USD has risen and is now at 1.3150, an increase of 0.34%. Before the New York market opened, the (GBPUSD) price closed near yesterday's highest price, supported by the positive signal from the relative strength indicator. After releasing some overbought levels, it tested the main bearish trend line in the short term, while touching the resistance level of its EMA50. It was affected by the negative technical pattern formed in the short term, which showed a rising wedge pattern, strengthening the possibility of a return of selling pressure in the xmniubi.coming period.

Spot gold: As of 21:20 Beijing time, spot gold has risen and is currently trading at 4138.74, an increase of 0.10%. Pre-market in New York, (gold) price fell in the last intraday session to collect gains from its previous rise, trying to unload some overbought conditions on the relative strength indicator, especially in the event of a negative overlapping signal, to gather bullish momentum that may help it resume strong gains in the xmniubi.coming period, dominated by a small bullish wave and trading along the trendline on a short-term basis, in addition to the dynamic support represented by its exchange above the EMA50.

Spot silver: As of 21:20 Beijing time, spot silver has risen, now trading at 51.359, an increase of 0.11%. Pre-market in New York, in recent intraday trading, (silver) prices have declined, influenced by a short-term bearish corrective trendline breakout, while relying on EMA50 support to recoup the gains of the previous rise and attempt to gain bullish momentum by releasing the overbought condition of the Relative Strength Index, especially on the exit.In the event of negative signals, it is expected to recover in the xmniubi.coming period.

Crude oil market: As of 21:20 Beijing time, U.S. oil fell, now trading at 58.130, a decrease of 1.21%. The (crude oil) price rose in the last intraday trade before the New York session, although it is still trading below the EMA50 and continues to be under negative pressure, which strengthens the dominance and stability of the bear trend in the short term, especially when the price trades along the trend line, coupled with the formation of a negative divergence after the relative strength indicator reaches overbought levels, which is exaggerated xmniubi.compared to the price movement, and negative signals appear at the same time.

4. Institutional view

ING: European natural gas fell below 30 euros/MWh, and market supply and demand stabilized

⑴ ING xmniubi.commodity experts Eva Mandy and Warren Patterson pointed out that European natural gas prices have fallen below 30 euros/MWh. Mild weather forecasts and sufficient liquefied natural gas supply have eased short-term concerns, but low inventory levels and fund positions still allow market risks to persist. ⑵ EU natural gas inventories are declining faster than the five-year average. Experts pointed out: "European natural gas prices came under pressure and fell further yesterday, with the Title Transfer Facility (TTT) benchmark price falling below 30 euros/MWh, setting a new low since May 2024. The peace negotiations between Russia and Ukraine have put some pressure on gas prices, and 1 The February weather forecast shows that the temperature will be warmer than usual after the recent cold wave. "Recent cold weather has caused an accelerated decline in EU natural gas inventories. The current inventory fill rate is 79%, which is significantly lower than the five-year average of 89%. Large investment funds still hold huge net short positions in the market. The risk of a large number of positions is particularly prominent as the winter deepens. The fund xmniubi.community currently seems to believe that the supply outlook is becoming looser, mainly due to the continued growth of LNG supply.”

xmniubi.commerzbank: The New Zealand Federal Reserve meeting may unexpectedly suspend interest rate increases.

< p>⑴ xmniubi.commerzbank foreign exchange analyst Volkmar Bauer pointed out that the New Zealand Federal Reserve will hold its last monetary policy meeting of the year on Wednesday morning. This will also be the last meeting chaired by Acting Chairman Christian Hoxby - Anna Breimann will officially take over as chairman next week. ⑵ Ball pointed out: "The market has fully priced in a 25 basis point interest rate cut, and most economists agree that the central bank will cut interest rates again. But I am relatively cautious: New Zealand's inflation is still hovering at the upper edge of the central bank's 2-3% tolerance range, and has been picking up in recent quarters - for example, the annualized inflation rate in the third quarter is still 4%." ⑶ "At the same time, the New Zealand dollar tied with the US dollar to become the weakest currency among the G10 currencies. At the beginning of the yearIt has fallen about 11% against the euro since then. Since last summer, the Reserve Bank of New Zealand has cut interest rates by a total of 300 basis points, of which 50 basis points were xmniubi.completed at the October meeting. The overall effect of these interest rate cuts has not yet been fully transmitted to the economy, but a rebound in sentiment indicators and rising inflation expectations have shown slight signs of improvement. "⑷"To sum up, I think the central bank lacks sufficient reasons to cut interest rates again in the short term, and is more likely to choose to suspend the current interest rate cutting cycle. However, as mentioned above, the market holds different views from most economists, so it would not be surprising if interest rates are indeed cut tomorrow. The impact on the New Zealand dollar is expected to be relatively limited. ”

The above content is about “[XM Foreign Exchange Decision Analysis]: Powell faces key choices, short-term trend analysis of spot gold, silver, crude oil and foreign exchange on November 25”. It is carefully xmniubi.compiled and edited by the editor of