The U.S. government shutdown crisis is expected to end, safe-haven demand supports gold prices higher, and oil prices focus on renewed geopolitical tensions

Basic news

On Monday (November 10, Beijing time), spot gold was trading around US$4,010 per ounce. The price of gold rose last Friday, mainly due to the weakening of the US dollar and the uncertainty about the US government shutdown. The hedging demand brought by the qualitative support has also changed the market's expectations for the Federal Reserve's monetary policy; U.S. crude oil traded around US$59.80 per barrel. Oil prices closed slightly higher on Friday. The market focused on the talks between U.S. President Trump and Hungarian Prime Minister Orban. At the same time, tensions in Gaza may resurface.

Stock Market

After falling sharply during the session last Friday, the three major U.S. stock indexes narrowed their losses significantly in late trading. In the end, the Dow Jones Industrial Average and the S&P 500 Index managed to rise slightly, while the Nasdaq Index closed slightly lower.

The Dow Jones Industrial Average rose 0.16% to 46987.10 points; the S&P 500 Index rose 0.13% to 6728.80 points; the Nasdaq Index fell 0.21% to 23004.54 points.

Behind this trend is a concentrated expression of investors' multiple concerns: concerns about the economic outlook, doubts about the overvaluation of technology stocks, especially artificial intelligence concept stocks, and the uncertainty caused by the longest federal government shutdown in history, which together suppressed the market's risk appetite. It is worth noting that the reversal in late trading was closely related to a piece of news - reports that the congressional deadlock that led to the government shutdown may be turning around, a development that brought long-lost optimism to the market.

Despite a rebound in late trading, the three major stock indexes still fell cumulatively last week, with the Nasdaq recording its largest weekly percentage decline since the end of March. This was mainly due to market concerns about theThe artificial intelligence momentum stocks that have driven gains over the past few months have lost some of their confidence. The negative impact of the government shutdown is already showing up in economic data, with a preliminary reading of the University of Michigan's consumer confidence index plunging to its lowest level in more than three years and survey participants' assessment of the current situation reaching the most pessimistic reading in the survey's history. At the same time, the shutdown has brought official economic statistics to a standstill, which not only makes the Federal Reserve face greater challenges in formulating policies, but also adds additional uncertainty to investors in judging the economic situation.

At the corporate level, the third-quarter earnings season is xmserving.coming to an end, and the overall performance is quite strong. Among the 446 S&P 500 xmserving.companies that have released financial reports, as many as 83% have exceeded expected profits. Analysts currently predict that the index’s third-quarter earnings growth rate will reach 16.8% year-on-year, much higher than the annual growth rate of 8.0%. However, the performance of individual stocks was uneven: Expedia's stock price surged due to solid growth in bookings in the business travel department; Microchip Technology's revenue forecast was weak, Block's profit fell short of expectations, and Take-Two Interactive all fell significantly due to the postponement of the release of "Grand Theft Auto 6." It is particularly worth mentioning that although Tesla shareholders approved CEO Musk's historic xmserving.compensation plan, the xmserving.company's stock price still closed lower. The current market is at such a delicate moment: Although corporate earnings fundamentals remain solid, investors seemed to have fallen into a "sell first and ask questions later" cautious mentality in November, while remaining highly alert to the weakening labor market and weakness in the real estate industry.

Gold Market

Gold prices rose last Friday, mainly supported by the weakening of the U.S. dollar and safe-haven demand brought about by the uncertainty of the U.S. government shutdown. Spot gold closed at US$4,005.21 per ounce, an increase of 0.7%; U.S. gold futures closed at US$4,009.80, an increase of 0.5%.

The fall in the U.S. dollar has boosted the appeal of dollar-denominated gold, while technology-heavy stock markets are facing their biggest weekly decline in seven months, raising concerns about the sustainability of gains in artificial intelligence-related stocks. In terms of key economic data, as the government shutdown delayed the release of the monthly non-farm payrolls report, traders turned to private sector employment data, which showed a loss of jobs in October, suggesting possible weakness in the labor market.

The market’s expectations for the Federal Reserve’s monetary policy have also changed. Traders currently believe that the possibility of a 25 basis point interest rate cut in December reaches 66%.

Oil market

Oil prices rebounded last Friday and ended slightly higher. Market attention focused on a meeting at the White House between U.S. President Trump and Hungarian Prime Minister Viktor Orban, raising expectations among investors that this could find a way for Hungary to continue using Russian crude oil, thereby alleviating supply concerns caused by related sanctions.

Despite the rise in oil prices last Friday, the two major benchmark crude oil contracts still fell by about 2% last week, mainly due to pressure from the world's major oil-producing countries to continue to increase production.Oil prices were lower earlier in the session as the U.S. government shutdown caused a large number of air traffic controllers to be absent without pay and reduced the number of flights, suppressing fuel demand.

Fundamentally, U.S. crude oil inventories rose more than expected due to increased imports and slowing refining activity, although declines in gasoline and distillate inventories provided some support. Meanwhile, a private report suggested the U.S. labor market showed signs of weakness in October. Data from major Asian countries show positive signals. Crude oil imports increased month-on-month and year-on-year in October, and demand remains solid.

In addition, xmserving.commodities trader Gunvor has withdrawn its proposal to acquire the overseas assets of Russia's Lukoil. Previously, the U.S. Treasury Department made it clear that it opposed the deal, a move that also added uncertainty to the market.

The health department of the Gaza Strip issued a statement on the 9th local time, saying that the Israeli army launched attacks on many places in the Gaza Strip that day, killing one person and injuring five others. The Israel Defense Forces said on the same day that at least three Palestinian personnel were attacked by the Israeli army because they crossed the "yellow line" set by Israel, which is the Israeli military deployment line agreed in the Gaza ceasefire agreement.

Foreign Market

The U.S. dollar came under pressure last Friday, recording weekly losses against both the euro and the yen, as investors struggled to weigh the Fed's hawkish stance against concerns about the U.S. economy. Due to the ongoing shutdown of the federal government, the October employment report originally scheduled to be released last Friday was not released as scheduled, resulting in a lack of key economic data for the market to refer to, and U.S. bond yields fell slightly.

Behind the fluctuations in the foreign exchange market are multiple factors. The euro found support against the U.S. dollar on expectations that European policy rates will remain stable, while the U.K. and the U.S. are expected to cut interest rates further in 2026. While Fed Chairman Powell's previous xmserving.comments about the risks of easing policy had helped the dollar strengthen for five consecutive days, weak labor data released last Thursday immediately reversed that momentum.

Jeffrey economists pointed out that the market is overly sensitive to any signal about the labor market, and the data gap caused by the government shutdown has exacerbated this fluctuation. He believes the threshold for the Fed to cut interest rates at its December meeting is still high.

The U.S. dollar index fell 0.15% last week, ending two consecutive weeks of gains. Analysts pointed out that although the U.S. dollar has recently regained some safe-haven appeal, the Japanese yen remains the market's preferred defensive currency. Although the U.S. dollar may rebound in the short term due to the relatively strong U.S. economy, current market sentiment remains weak.

International News

The Senate is in a row: the recess is canceled and will meet again at 02:30 on Monday morning

The U.S. Senate was originally scheduled to enter the Veterans Day recess week from the 8th, but did not adjourn on the 8th. Members of the two parties stayed in Washington to continue negotiations on ending the government "shutdown". The Democratic Party revealed that if the two parties reach an agreement, senators will be notified 24 hours before the vote to read the text of the bill. Members need to keep their schedules flexible so that they can return to vote at any time. Senate Republican leader aboutJohn Thune said on the 8th that he was working hard to reach an agreement with Democratic senators and hoped to restore the government's operations through a "consolidated appropriation package" containing three full-year appropriation bills. Thune said that the draft is "almost xmserving.complete" and hopes to vote as soon as possible but only if "there are enough votes." He also revealed that the two sides have launched "active cross-party dialogue" in the past 24 hours and is optimistic about the progress of the negotiations. The Senate adjourned until 13:30 local time on Sunday, which corresponds to 02:30 Monday morning Beijing time.

The U.S. Senate Democrats are pushing for an appropriation plan to end the government shutdown crisis

According to reports from the AXIOS website, several U.S. Senate Democratic congressmen said on Sunday that they are ready to advance a xmserving.comprehensive bill to break the government shutdown deadlock that has lasted for more than a month. The move is seen as the most groundbreaking development to date in negotiations between the two parties. Sources pointed out that at least 10 Democratic senators are expected to support a procedural motion to promote solutions including a spending package and a short-term appropriation measure that will allow the federal government to maintain operations until the end of January next year. It is reported that the agreement also includes a vote in December on the Democratic proposal to extend the Affordable Care Act (ACA) tax credits for one year, and may include provisions to assist federal employees who have lost their jobs due to the government shutdown. Senators rarely stayed in Washington for meetings over the weekend and are expected to hold a key vote on procedural motions on the government funding package on Sunday

Hungarian Prime Minister: The meeting between Russian and American leaders will be held when conditions are ripe, but there is currently no specific timetable

Hungarian Prime Minister Orban said at the White House on November 7 that the meeting between Russian and American leaders in Budapest will be held when conditions are ripe, but there is currently no specific timetable. Hungarian Foreign Minister Szijjarto, who accompanied the visit to the United States, said that Hungary is ready to host, but preparations will still take weeks or months, and he hopes that the meeting can promote the resolution of the Ukrainian conflict. The plan for this meeting originated from Trump’s phone call with Putin on the 16th of last month, but he announced the shelving five days later on the grounds that he “did not want to waste time.” According to analysis, the root cause of the deadlock lies in the fundamental differences between the two sides on the Ukraine issue. According to people familiar with the matter, Russia reiterated its original position and actually rejected the U.S. request, which hindered the progress of the meeting.

Trump stated that he is willing to meet with Putin and the proposed location is Hungary

US President Trump held talks with visiting Hungarian Prime Minister Orban at the White House on November 7. During the period, Trump told the media that he still hopes to hold a meeting with Russian President Vladimir Putin and made it clear that if the meeting xmserving.comes to fruition, it should be held in Budapest, the capital of Hungary. It is worth noting that Trump publicly stated at a press conference on October 22 that "we have canceled the meeting with President Putin" and admitted that "it doesn't feel right." This latest statement shows a change in its attitude towards high-level meetings with Russia.

Canadian Prime Minister: Decades of increasingly close economic ties between Canada and the United States are over

Local time 11On March 7, Canadian Prime Minister Carney said that the decades of increasingly close economic ties between Canada and the United States have xmserving.come to an end. Carney said that Canada once had some economic advantages because of its close ties with the United States, but now this has become Canada's weakness. This change is rapid and with little transition, and he called for a rapid and sweeping change in Canada's economic strategy.

The U.S. Senate failed to advance the appropriation bill, and federal employees continued to be without pay

On November 7, local time, the U.S. Senate failed to pass the motion to advance the "Specific Federal Employees Appropriation Bill" (S.3012) by a vote of 53 to 43, failing to reach the 60 vote threshold required for passage. The bill aims to provide funding to some federal employees who still need to perform their duties during the forced shutdown to cushion the impact of the government shutdown. Although some lawmakers called for the restoration of funds for key departments as soon as possible, the final voting results showed that the differences between the two parties remained and the government "shutdown" will not be lifted for the time being.

Trump: If the government resumes operations, we are willing to work with both parties on health care issues

US President Trump: I regret that the American people are being terrorized by Democrats who have decided to shut down the government and force me and other Republicans to continue providing Obamacare subsidies. These subsidies are a windfall for health insurance xmserving.companies and a disaster for the American people. Since the passage of Obamacare, the stock prices of the largest health insurance xmserving.companies have soared (some by more than 1,000%!). Meanwhile, Americans' premiums have more than doubled, contrary to President Obama's promises. I believe this money should go directly to people, giving them access to better health care and promoting xmserving.competition in the market. This practice that is making health insurance xmserving.companies rich must stop. Now is the time to lower premiums, not make insurance xmserving.companies rich. I stand ready to work with both parties to resolve this issue once government resumes operations.

U.S. consumer credit growth accelerated, with non-revolving credit recording the largest growth this year

U.S. consumer borrowing increased in September, driven by the largest growth in non-revolving credit this year. Data released by the Federal Reserve on Friday showed that total outstanding consumer credit increased by $13.1 billion in September. The August data was revised upward to an increase of $3.1 billion, while the median forecast was for an increase of $10.2 billion. Among them, non-revolving credit, including auto loans and tuition loans, increased by $11.4 billion, and credit cards and other revolving credit increased slightly by $1.6 billion. The report does not include residential mortgage loans. The increase in non-revolving loans likely reflected in part higher auto sales during the month, as U.S. consumers largely reined in credit card balances amid concerns about a weakening job market and high costs of living.

Houthi armed forces: If the ceasefire in Gaza breaks down, they will resume attacks on Israel

Yemen’s Houthi armed forces warned on the 9th that if the ceasefire agreement in the Gaza Strip breaks down, the organization will resume attacking Israel and ban Israeli ships from sailing in the Red Sea and Arabian Sea. Masirah, controlled by the HouthisTV stations reported that Yousef Madani, chief of general staff of the Houthi armed forces, made the above statement in a letter to the headquarters of the Qassam Brigade, an armed faction of the Palestinian Islamic Resistance Movement (Hamas), on the same day. Madani said: "We are paying close attention to the development of the situation. We announce that if the enemy resumes its attack on Gaza, we will restart military operations against the Israeli mainland and once again impose a blockade on Israeli shipping in the Red Sea and Arabian Sea."

Domestic News

Interpretation of 202 by Dong Lijuan, chief statistician of the City Department of the National Bureau of Statistics CPI and PPI data for October 5

In October, policies and measures such as expanding domestic demand continued to be effective. Driven by the National Day and Mid-Autumn Festival holidays, the consumer price index (CPI) rose by 0.2% month-on-month and 0.2% year-on-year. The core CPI excluding food and energy prices rose by 1.2% year-on-year, and the increase expanded for the sixth consecutive month. Affected by factors such as the improvement of supply and demand relations in some domestic industries and the transmission of international xmserving.commodity prices, the industrial producer price index (PPI) increased by 0.1% month-on-month from unchanged last month, which was the first increase during the year; it fell by 2.1% year-on-year, and the rate of decline narrowed by 0.2 percentage points from the previous month, narrowing for the third consecutive month.

National beef cattle breeding has been profitable for six consecutive months

As the weather turns colder, beef consumption has entered the traditional peak season, and the beef market is booming in both supply and sales. It is understood that after experiencing a downturn last year, beef prices have continued to rebound since March this year, with a cumulative increase of approximately 10%. After a plateau in the autumn, prices have risen again in the past two weeks, driven by consumption. In Binzhou, Shandong Province, consumers are enthusiastic about buying beef. On the upstream production side, beef cattle breeding is also picking up. With the rebound in beef cattle prices, beef cattle breeding across the country has achieved overall profitability for six consecutive months.

The above content is all about "[XM Foreign Exchange Market Analysis]: The U.S. government shutdown crisis is expected to end, safe-haven demand supports the rise of gold prices, and oil prices focus on the resumption of geopolitical tensions". It is carefully xmserving.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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