Will CPI give the Fed "stable happiness"? Be wary of geopolitics catalyzing a new round of market conditions!

The sharp rise in US Treasury yields has been a sword hanging over global markets over the past week, with 10-year and 30-year yields calming after touching 2007 highs of nearly 4.9 per cent and 5.1 per cent respectively. According to analysts, this is mainly due to the optimistic outlook for the US economy, the hawkish stance of the Federal Reserve and the deepening of the US fiscal woes. On Friday, the number of new non-farm payrolls exceeded expectations, further increasing the probability of the Federal Reserve raising interest rates again this year.

In the coming week, the latest U.S. Consumer Price Index (CPI) reportwillBe a bright spot, or be another catalyst to change market interest rate hike expectations. The market alsowillFrom thatwillThe September meeting notes the Federal Reserve officials' trade-offs on economic growth and inflation, and the dense speaking schedule of nearly 10 policymakerswillProvide more clues. In addition, the US stock Q3 earnings seasonwillIt officially kicked off.

Here are the new week's marketswillKey points of concern (all in Beijing time):

Central Bank News: Federal Reserve officials are out in force, has the selling pressure on gold been exhausted?

On the Federal Reserve side:

On Monday at 21:00, the 2023 FOMC voting committee and Dallas Federal Reserve President Logan delivered a speech on the U.S. economic outlook and monetary policy.

On Tuesday at 00:50, Federal Reserve Vice Chairperson Jefferson delivered a speech; at 21:30, the 2024 FOMC voting committee and Atlanta Federal Reserve President Bostic delivered a speech on the US economic outlook.

Wednesday 01:00, Federal Reserve Governor Waller delivered a speech on monetary policy; 03:00, 2023 FOMC voting committee, Minneapolis Federal Reserve President Kashkari delivered a speech; 06:00, 2024 FOMC voting committee, San Francisco Federal Reserve President Daley delivered a speech; 16:15, Federal Reserve Governor Bowman delivered a speech.

Thursday 00:15, 2024 FOMC voting committee, Atlanta Federal Reserve President Bostick delivered a speech; 02:00, the Federal Reserve announced the September monetary policy meeting notes; 04:30, 2025 FOMC voting committee, Boston Fed President Collins delivered a speech.

On Friday at 01:00, the 2024 FOMC voting committee and Atlanta Federal Reserve President Bostick gave an opening speech at an event; at 04:00, the 2025 FOMC voting committee and Boston Federal Reserve President Collins addressed the banking conference.

The Federal Reserve welcomed the easing of the labor market, but the trend now appears to be unclear. The number of non-farm payrolls added in September nearly doubled from expectations, but the good news is that wage growth has slowed. The new report "doesn't really change my view that we have a strong labor market and we're seeing progress in inflation," Mester, the president of the Cleveland Fed, said in an interview with foreign media on Friday.Strong job growth alone may not be enough to force the Federal Reserve to raise interest rates again this yearOfficials are likely to continue to focus on otherwillPublished data, including inflation reports.

Industrial foreign exchangeEconomists also point out that,Some key developments could slow economic growth this fall, which could also prevent the Federal Reserve from reacting too sharply to the latest jobs dataFor example, long-term interest rates at financial marekt have risen sharply in recent weekswillIt makes it more expensive for consumers to buy cars or homes and for businesses to expand. Blerina Uruci, chief U.S. economist at T. Rowe Pric, said, "PolicymakerswillWe have to balance.The recent rise in Treasury yields and tighter financial conditions have helped them achieve much。”

However, if the economy continues to overheat, leading to increased upside risks for inflation, the Federal Reserve could still be forced to take more rate hikes and strengthen interest rateswillThe research firm TS Lombard said that because the Federal Reserve is likely to raise interest rates until the economy goes wrong,10-Year Treasury yieldwillRise to 6%Steven Blitz, the firm's chief U.S. economist, wrote in a report, "Are the 6.5% federal funds rate and the 6% 10-year Treasury ratewillComing? Very likely. "This means that the Federal ReservewillMore than 100 basis points.While the Fed left interest rates unchanged at its last meeting, policymakers have since trumpeted a hawkish tone of "higher and longer," the September policy meeting noteswillExplain their views more fully.

Rising Treasury yields have dented gold's appeal. While strong non-farm payrolls data sparked fears of another Federal Reserve rate hike, gold prices closed higher on Friday after nine straight days of losses, which Tai Wong, an independent metals trader in New York, said showedThe selling pressure has been exhausted, triggering short covering.Ole Hansen, head of commodity strategy at Saxo Bank, wrote in a note that with the recent rise in U.S. Treasury yields and the U.S. dollar, it is difficult to establish a bullish case for gold. But "our patient bullish view on gold is as we wait for the Federal ReservewillAs the focus shifts from interest rate hikes to rate cuts, the timing for a new round of gold price gainsIt relies heavily on US economic data。”

Other important central bank agendas:

At 19:30 on Thursday, the European Central Bank released its September monetary policy meeting notes.

On Friday at 16:30, Bank of England Governor Bailey addressed a conference hosted by the Institute of International Finance.

On Friday at 21:00, European Central Bank President Christine Lagarde delivered a speech.

The European Central Bank is scheduled to release its September policy meeting notes on Thursday, but it is questionable whether this will have much impact on markets. ECB policymakers were very active after the last interest rate decision, with a lot of comments,The doves have recently appeared more outspoken in calling for a pause in rate hikes.So even if the meeting notes a tightening bias, investors may see it asObsoleteBut European Central Bank President Christine Lagarde recently reiterated that future policy decisions "willMake sure to keep the interest rate within the necessary timewill"Maintain a sufficiently restrictive level."

As far as the Bank of England is concerned, after its surprise decision to pause interest rate hikes, the main advantage of the pound against the dollar - peak UK interest rateswillExpectations in the US have faded. However, Mr. Bailey, governor of the Bank of England, stressed that the fight against inflation was not yet complete. He expected inflationary pressures to dissipate quickly this year and headline inflation by the end of 2023willTo 5 per cent or slightly below, but "there is still some way to go" after that. These remarks suggestThe Bank of England has no room to cut interest rates.Sterling has been battered by the dollar's recovery, the Bank of England's unexpected dovish tilt and the gloomy outlook for the UK economy, losing its title as the world's best performing currency this year.

Important data: CPI may continue to slow down, and the rise in US bond yields will be stalled?

Wednesday at 20:30, the U.S. PPI annual and monthly rates for September.

Thursday at 14:00, the UK's three-month GDP and manufacturing output were recorded in August.

At 00:00 on Thursday, the EIA released its monthly short-term energy outlook report. At 16:00, the IEA released its monthly crude oil market report; to be determined, OPEC released its monthly crude oil market report (the specific release time of the monthly report is to be determined, usually around 18-21:00 Beijing time).

On Thursday at 20:30, the annual rate of CPI in the United States was not adjusted quarterly in September, the monthly rate of CPI after the quarterly adjustment in September, the annual rate of core CPI in September, the monthly rate of core CPI in September, and the number of initial jobless claims in the United States for the week ending October 7.

On Friday at 22:00, the expected one-year inflation rate in the United States in October and the preliminary value of the University of Michigan Consumer Confidence Index in October.

The expected month-on-month growth rate of the overall CPI in the United States in SeptemberwillSlowing to 0.3% year-on-year growthwillIt fell to 3.6%, as gasoline prices were relatively stable last month. The Fed is more concerned about the expected month-on-month growth rate of core CPIwillMaintained unchanged at 0.3%, year-on-year growth ratewillFrom 4.3% to 4.1%, this could beReinforcing the view that inflationary pressures are recedingThe indicator has been declining steadily over the past 12 months.

The continuation of the weak trend in core inflation is expected to cause the Federal Reserve to re-examine the stickiness of inflation, leading to its decision to hold its ground in NovemberUnless the CPI data is higher than expected, the market is unlikely to react negatively, which means that the rise in U.S. Treasury yields may take a breather and the boost to the dollar will not be sustainablewillPay attention to the leading indicator PPI data first. Friday's preliminary consumer confidence survey from the University of Michigan, especially the inflation expectations data, is also worth watching.

In the UK, investors remain pessimistic about its growth potential. But in reality the situation is not entirely bleak. The Office for National Statistics recently released revisions to its GDP calculations, which now estimate that the UK economy is growing by 1.8% compared to before the epidemic, compared with a previous estimate of a 0.2% decline. In addition, the final PMI for services was revised up sharply in September, easing concernswillFears of an upcoming economic downturn. However, namelywillThe release of monthly GDP output and production and trade data is unlikely to have a significant impact on the near-term outlook for the pound.As long as a soft landing remains the underlying scenario for the US economy, a series of upside surprises for UK growth indicators, or a downside surprise for inflation, will be required to lift the pound out of stagflation risk.

Important event: The US House of Representatives seeks a new speaker, escalating the Israeli-Palestinian conflict

House Republicans next weekwillFor a closed-door meeting of speaker candidates, it is reported that Trump is considering visiting Congress on the 10th, after he said he would like towillTemporarily serve as Speaker of the House of Representatives if necessary. Biden said on Friday that hewillEfforts to work with any future speaker and calls on Republicans to pass federal spending legislation before current funding expires on November 17. The ouster of House Speaker McCarthy is the first in US history, with the lack of leadership in Congress heightening the risk of a government shutdown and turmoil in US stock and bond markets.

The crude oil market was also volatile, with oil prices falling as much as $10 during the National Day holiday. However,The latest geopolitical upheaval could provide impetus for oil prices to resume their upward trendOn October 7 local time, the situation between Palestine and Israel escalated again. The Israeli army began attacking Palestinian Islamic Resistance Movement (Hamas) targets in the Gaza Strip in response to its earlier rocket attacks on Israel. According to Israeli N12 coverage, at least 40 Israelis were killed in the Hamas attack and 740 were wounded. Currently,The Israel Defense Forces has declared a state of warThe spread of the Israeli-Palestinian conflictwillIncrease the demand for market hedging, orwillHelping gold prices rebound.

On the other hand, Saudi Arabia's attitude towards limiting production has eased. According to the Wall Street Journal, Saudi Arabia told the White House that if crude oil prices rise, it willwillWilling to increase oil production early next year. The move is aimed at promoting an agreement to normalize relations between Saudi Arabia and Israel. Under the agreement, Saudi ArabiawillRecognize Israel, the United StateswillSign a defense deal with Saudi Arabia in return. The deal may also include U.S. nuclear aid and represents a significant shift for Saudi Arabia. Nonetheless, Saudi negotiators stressed that market conditionswillDirecting any production action, discussions do not represent a long-term agreement to reduce prices.

company financial report

earnings seasonwillEquity investors are eager to see a catalyst for a recovery in equities amid soaring Treasury yields. JPMorgan Chase, Wells Fargo, Citigroup and BlackRock are among the big banks and Financial Institutions GroupwillWith delinquency rates soaring and excess savings depleted, many are anticipating their financial numberswillhighlightConsumer weaknessOther companies preparing to report earnings include PepsiCo, Delta Air Lines and UnitedHealth Group

Overall, S & P 500 companies expect third-quarter earnings, according to LSEG IBESwillGrowth was 1.6% year-on-year, while second-quarter earnings fell 2.8%. But companies overallPessimistic about the profit outlookOf the 116 S & P 500 companies that issued earnings guidance, 74 issued negative guidance and 42 issued positive outlooks, according to FactSet. The number of companies posting earnings was the highest since FactSet began tracking the metric in 2006, surpassing the previous quarter's record of 113 companies.

Closure arrangement

On Monday, the Seoul Stock Exchange in South Korea was closed for Korean Language Day, the Tokyo Stock Exchange in Japan was closed for Sports Day, and the Toronto Stock Exchange in Canada was closed for Thanksgiving Day. On Tuesday, the Taiwan Stock Exchange of China was closed for a day for Double Ten.