On Monday, Israel's avoidance of attacking Iran's crude oil or nuclear facilities signified a de-escalation of tensions in the Middle East, leading to a significant drop in oil prices. The price of U.S. oil futures experienced the largest single-day decline in over two years. The West Texas Intermediate (WTI) crude oil futures for delivery in December at the New York Mercantile Exchange fell by $4.48 on Monday, a decrease of 6.13%, marking the largest single-day drop since the 7.93% plunge on July 12, 2022, closing at $67.38 per barrel. The attack bypassed locations of oil, nuclear energy, and civilian infrastructure. Iranian crude industry media stated that Iran's oil industry operations are "proceeding normally" without interruption. Prior to this, concerns about attacks on Iranian oil facilities had been escalating in recent weeks. According to data from the U.S. Energy Information Administration, Iran accounts for 4% of the global oil supply. Tudor, Pickering Holt analyst Matt Portillo stated that WTI prices could significantly drop in the coming year. Portillo said, "If there is no tension in the Middle East, our base forecast for WTI oil prices in 2025 remains at $65 per barrel; if OPEC+ does not show significant constraints on restoring market supply, oil prices may trend lower."
Additionally, top U.S. economist and Wharton School of Finance professor Jeremy Siegel recently stated that the Federal Reserve may keep interest rates unchanged at next week's interest rate meeting, which would surprise the market. Siegel indicated that although investors are almost certain that the Federal Reserve will cut rates by 25 basis points in November, if this Friday's non-farm employment report is strong, it could overturn these expectations. For the Federal Reserve, with inflation gradually approaching its target, the next step after initiating an easing cycle largely depends on economic data, and the resilience of the job market may continue to be a key factor affecting the Federal Reserve's monetary policy stance. Economists expect that this Friday's non-farm employment report will show an addition of 110,000 jobs in October. Following the surprising increase of 254,000 non-farm jobs in September, the October data may also significantly exceed expectations, potentially further adjusting market expectations for the extent of Federal Reserve rate cuts.
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Data to watch today includes Germany's November Gfk Consumer Confidence Index, the U.S. September Wholesale Inventories Monthly Rate Preliminary, the U.S. October Conference Board Consumer Confidence Index, and the U.S. September JOLTs Job Openings.
Gold/USD
Gold fluctuated downward yesterday, closing slightly lower on the daily chart, with the current exchange rate trading around 2750. In addition to profit-taking exerting some pressure on gold, the easing of tensions in the Middle East and the cooling of market risk aversion were also significant factors in the decline of the safe-haven asset gold. However, expectations of a rate cut by the Federal Reserve in November limited the downside for gold. Today, focus on the resistance around 2760, with support near 2740.
AUD/USD
The Australian dollar fluctuated downward yesterday, losing the 0.6600 level and hitting a 12-week low, with the current exchange rate trading around 0.6570. The decline in commodity prices, such as crude oil, was the main factor pressuring the commodity currency Australian dollar to weaken. Additionally, after breaking below the support at the 0.6600 level, the Australian dollar attracted some technical selling, which also put pressure on the exchange rate. However, the retreat of the U.S. dollar index limited the downside for the exchange rate. Today, focus on the resistance around 0.6650, with support near 0.6500.
USD/CAD
The USD/CAD fluctuated and consolidated yesterday, closing slightly lower on the daily chart, with the current exchange rate trading around 1.3900. In addition to profit-taking and technical selling near the 1.3900 level exerting some pressure on the exchange rate, the softening of the U.S. dollar index under the pressure of expectations for a Federal Reserve rate cut in November was also a significant factor in the exchange rate's retreat. However, the decline in crude oil prices due to easing geopolitical tensions limited the downside for the exchange rate. Today, focus on the resistance around 1.4000, with support near 1.3800.
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