From export bans to price controls, governments in Asia are taking a much more targeted approach than their Western counterparts in curbing global inflationary pressure, a strategy that appears to be working at least for now.
1. Forex Market Insight
U.S. Treasury yields fell on Thursday, 4th November 2021, and the yield curve steepened as markets unraveled expectations that the Federal Reserve will accelerate interest rate hikes.
The day before, the Fed hinted that it is not in a hurry to raise interest rates. Meanwhile, the Bank of England decided to hold off on raising interest rates, causing some of the European bond yields to fall sharply, also helped to push up the price of U.S. bonds.
The market is lifting these expectations of sharp rate hikes early, so the market is starting to realize that, at least from Powell’s speech, the Fed is very serious about remaining patient and allowing inflation to be moderately above target.
(EUR/USD 1-hour chart)
Today, pay attention to the 1.1535-line. If the euro runs steadily above the 1.1535-line, then pay attention to the suppression of the two positions 1.1583 and 1.1622 in turn. If the strength of the euro drops below the 1.11535-line, it will open up a further downside space. At that time, pay attention to the support of the 1.1501-line.
GBP Intraday Trend Analysis
The Bank of England unexpectedly kept interest rates unchanged yesterday, placing more importance on dealing with the slowing economic growth than inflation, but the central bank’s credibility has been called into question as a result. Thereby, causing the pound to plummet against the dollar and the dollar index to rise to a high since 13th October 2021.
(GBP/USD 1-hour chart)
The pound is mainly focused on the 1.3605-line today. If the pound runs below the 1.3605-line, it will still maintain the bearish trend. At that time, the bottom will pay attention to the support of 1.3409. If the pound rises above the 1.3605-line, then pay attention to the suppression of the 1.3669-line.
2. Precious Metals Market Insight
Yesterday, gold prices soared by more than 1%. On the one hand, the U.S. bond yields fell sharply.
During this interval, the United States and the United Kingdom have said not to raise interest rates, and the loose monetary policy will continue. However, the strong rise in the dollar and U.S. stocks limited the rally in gold prices.
Intraday focus on the October non-farm payrolls report, the market is expected to be better for this report, may be negative for gold prices.
(Gold 1-hour chart)
Today, the gold pays attention to the 1810-line. If the price of gold runs stably below the 1810-line, then pay attention to the support of the 1778 and 1768 positions. If the price of gold falls below the 1810-line, it will open up a further upside space. At that time, pay attention to the suppression of the 1820-line.
3. Commodities Market Insight
WTI Crude Oil
Oil prices rose by more than 3% yesterday, 4th November 2021. However, the gold then gave up its gains, and fell by more than 3% to a near one-month low of $78.25 per barrel. As OPEC+ maintained its established pace of production increases, the defying calls from the U.S. to increase production has led the market to speculation that the U.S. may use its strategic reserves.
(Crude oil 1-hour chart)
Today, oil prices pay attention to the 78.92-line. If the oil price breaks above the 78.92-line, then pay attention to the suppression at the 80 and 81.07 positions in turn. If the oil price runs stably below the 78.92-line, it will open up a further downside space. At that time, pay attention to support strength in two positions at 76.89 and 75.69.
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