October 9th Financial Breakfast: The US Senate rejected the proposal to end the government shutdown for the sixth time. Driven by safe-haven demand, spot gold is approaching the 4060 mark.
2025-10-09 07:28:05
Spot gold traded near $4,020 per ounce in Asian trading on Thursday (October 9th, Beijing time), breaking through the $4,000 mark for the first time this week and extending its record-breaking rally to $4,059.07 per ounce. Heightened geopolitical and economic uncertainty, coupled with market expectations of a US interest rate cut, prompted investors to flock to safe-haven assets. US crude oil traded near $62 per barrel, having hit a one-week high on Wednesday. Traders expected the lack of progress on the Ukraine peace agreement to keep sanctions on Russia in place, while reports also showed an increase in US oil consumption.
U.S. stocks closed higher on Wednesday, boosted by technology shares, as investors turned their attention to the minutes of the Federal Reserve's latest policy meeting for clues on the interest rate outlook due to the lack of economic data caused by the U.S. government shutdown.
The tech-heavy Nasdaq led the gains, driven by large-cap companies related to artificial intelligence, which have been the primary drivers of the market's gains this year. The S&P 500 and Nasdaq both hit record closing highs, while the Dow was essentially flat.
Chip stocks outperformed particularly well, while energy, consumer staples and homebuilders lagged.A report from the Mortgage Bankers Association (MBA) showed that demand for homebuy loans fell 4.7% last week despite a retreat in interest rates.
Bill Merz, head of capital markets research at Bank of America, said, “The market theme remains aggressive growth, with AI-related deals being announced one after another and anything that touches AI receiving significant attention.
As AI continues to be popular, rising domestic and geopolitical uncertainties in the United States have pushed gold prices above $4,000 per ounce, prompting investors to buy gold to hedge risks.
Merz added that over the past few years, we have seen that stocks and safe-haven assets can rise simultaneously, partly due to this dual reality: on the one hand, fundamentals currently support higher-than-normal valuations, and on the other hand, deficit spending must be financed by new debt.
The U.S. government shutdown has entered its eighth day. The deadlock in Congress means that market participants will lack official economic indicators in the short term, and the market can only wait for clues from the third-quarter earnings season starting next week.
In the absence of data, investors are focused on third-quarter earnings season, which begins next week, and minutes from the Federal Open Market Committee's September meeting for signs of further interest rate cuts from the Fed.
The minutes showed that the FOMC was divided, with policymakers expressing concern about rising labor market risks but remaining vigilant about inflation. Although "most policymakers believed that further easing of policy would probably be appropriate for the rest of the year," the timing and pace of further action remained uncertain.
Zachary Hill, head of portfolio management at Horizon Investments, said the current discussion is focused on how far the Fed can cut interest rates and whether policy remains restrictive. More broadly, the Fed's already difficult job is complicated by the lack of public sector economic data as the government shutdown continues.
Financial markets are currently pricing in a 92.5% chance that the Fed will cut interest rates by a quarter percentage point at the end of this month's policy meeting, scheduled for Oct. 29.
The Dow Jones Industrial Average fell 0.00% to 46,601.78 points; the S&P 500 rose 0.58% to 6,753.72 points; and the Nasdaq rose 1.12% to 23,043.38 points.
Among the 11 major sectors of the S&P 500, technology stocks .SPLRCT led the gains, while energy stocks .SPNY suffered the biggest declines.
Surging gold prices boosted U.S.-listed gold miners Newmont and Gold Fields, with shares rising 1.7% and 3.7%, respectively. Dell surged 9.1% after several brokerages raised their price targets. AMD jumped 11.4%, marking its third consecutive day of gains. The chipmaker's shares have risen more than 43% this week.
Gold prices broke through $4,000 an ounce for the first time on Wednesday, extending their record-breaking rally as investors flocked to the safe-haven asset amid growing geopolitical and economic uncertainty and expectations of U.S. interest rate cuts.
Silver prices also hit a record high on the same day, driven by the continuous rise in gold prices, attracting investors to buy.
Spot gold rose 1.7% to $4,050.24 per ounce, while U.S. December gold futures settled 1.7% higher at $4,070.5. Spot silver rose 3.2% to $49.35 per ounce, briefly hitting an all-time high of $49.57.
Matthew Piggott, head of gold and silver at Metals Focus, said the strong performance of gold prices reflects that the current macroeconomic and geopolitical background is extremely favorable for safe-haven assets, and also reflects the market's concerns about other traditional safe-haven assets.
Following a 27% gain in 2024, gold prices have risen 52% so far this year, making it one of the best-performing assets in 2025, outperforming global equities while the dollar and crude oil have fallen. Silver prices have risen 71% so far this year, benefiting from the same bullish factors as gold, while tight supply in the spot market has also provided support.
The rise in gold and silver prices is due to the resonance of multiple factors, including expectations of US interest rate cuts, rising political and economic uncertainties, strong buying by central banks around the world, increased ETF inflows and a weakening US dollar.
Piggott added, "Given that these factors will persist until 2026, we currently do not see a catalyst for a significant correction in gold prices. Therefore, we expect gold prices to continue to rise this year and are expected to challenge the $5,000 per ounce mark."
According to the World Gold Council (WGC), global gold ETFs have seen inflows of $64 billion so far this year, with a monthly record of $17.3 billion in September alone. Analysts point out that the fear of missing out (FOMO) is also fueling this rally.
From a technical perspective, gold’s relative strength index (RSI) has reached 88, indicating that the asset is overbought.
HSBC on Wednesday raised its average silver price forecasts for 2025 and 2026 to $38.56 and $44.50 an ounce, respectively, citing high gold prices, recovering investor demand and expectations of higher trading volatility.
The rally also spread to other precious metals. Platinum rose 2.8% to $1,660.78 an ounce, while palladium rose 7.2% to $1,434.25 an ounce, its highest level since June 2023.
Oil prices rose more than 1% on Wednesday to a one-week high as traders expected a lack of progress on a Ukraine peace deal to keep sanctions on Russia in place, while a weekly report showed rising U.S. oil consumption.
Brent crude futures rose 1.2% to close at $66.25 a barrel, while U.S. crude rose 1.3% to $62.55. This was Brent's highest close since September 30 and U.S. crude's highest close since September 29.
A senior Russian diplomat said momentum for a peace deal with Ukraine has largely run out. Analysts say a peace deal could allow more Russian oil to flow to global markets. U.S. energy data shows Russia will be the world's second-largest crude oil producer after the United States in 2024.
Russian Deputy Prime Minister Alexander Novak said on Wednesday that Russia is gradually increasing its oil production despite sanctions and was close to reaching its OPEC+ production quota last month, Interfax reported.
Russia's energy sector has been under severe pressure over the past two months due to waves of drone attacks in Ukraine, mainly targeting refineries.
Crude oil futures were also supported by investor expectations that the Federal Reserve will continue to cut interest rates. Investors have been deprived of most U.S. economic data during the U.S. government shutdown.
Federal Reserve officials agreed at their latest policy meeting that risks to the U.S. job market had grown enough to warrant a rate cut, but many policymakers remained wary of high inflation, minutes from the Sept. 16-17 meeting showed.
The Fed is widely expected to cut interest rates by 25 basis points at its October 28-29 meeting, according to the Chicago Mercantile Exchange Group's (CME) FedWatch tool. A rate cut could boost economic growth and oil demand.
Oil markets held onto gains as traders focused more on a U.S. report showing increased oil consumption last week than on a bigger-than-expected build in crude inventories.
The U.S. Energy Information Administration (EIA) reported that energy companies increased crude oil inventories by 3.7 million barrels in the week ending October 3. This was higher than analysts' forecasts for a 1.9 million-barrel increase and higher than the 2.8 million-barrel increase in crude oil inventories reported last week by market sources on Tuesday, citing data from the American Petroleum Institute (API). However, the EIA also stated that total weekly petroleum product supplies, representing U.S. oil consumption, rose to 21.99 million barrels per day last week, the highest level since December 2022.
The yen hit its lowest since mid-February against the dollar on Wednesday as concerns grew about increased fiscal spending in Japan, while the euro fell due to uncertainty in French politics.
With the U.S. federal government still under shutdown, the dollar could benefit from a lack of government economic data that would otherwise exacerbate market volatility and potentially point to a weakening economy, analysts said.
Sanae Takaichi's unexpected victory in Japan's ruling party leadership election over the weekend hit the yen on expectations of increased government stimulus.
“The market believes that the Kaohsiung government will adopt policies more similar to those of the Abenomics era,” said Vassili Serebriakov, a foreign exchange and macro strategist at UBS. “In other words, expansionary fiscal policy and relatively loose monetary policy. But at this point, the specific policy is obviously still unknown.”
The dollar was last up 0.53% against the yen at 152.7 yen, having earlier hit 152.99, its highest since February 14, up from 147.44 on Friday. The dollar was boosted by a lack of U.S. government economic data that could have signaled a slowdown.
Minutes of the Federal Reserve's September meeting released on Wednesday showed officials agreed that risks to the U.S. job market had increased enough to support an interest rate cut, but many remained wary of high inflation.
CME's FedWatch tool shows that traders generally expect the Federal Reserve to cut interest rates by 25 basis points at its October 28-29 meeting, with a 78% probability of another rate cut in December. The euro fell 0.33% against the dollar to $1.1616 in late New York trading, having earlier hit $1.1597, its lowest level since August 27.
France's caretaker Prime Minister Jean-Marie le Corny said on Wednesday that a deal on the 2026 budget could finally be reached despite the political crisis.
Le Corny, France's fifth prime minister in two years, resigned and resigned just hours after announcing his cabinet on Monday, resulting in the shortest-serving government in modern French history. He said on Wednesday that President Emmanuel Macron might nominate a new prime minister within the next 48 hours, sending the euro paring losses.
The New Zealand dollar fell 0.33% to $0.5779 against the U.S. dollar, having earlier hit $0.5735, its lowest since April 11. The Reserve Bank of New Zealand unexpectedly cut interest rates by a massive 50 basis points and signaled further easing measures in the face of recent deteriorating economic data.
The U.S. Senate again failed to pass a bill to fund the government and end the shutdown
The US Senate again rejected a draft bill for temporary government funding, sending the Trump administration shutdown into its second week. The Democratic-backed bill failed by a 47-52 vote around 12:50 PM ET. A vote on the Republican version took place shortly thereafter. These closely contested stopgap measures have failed in five previous votes. Democrats want any funding bill to include health care, specifically extending subsidies for Obamacare, which are set to expire at the end of the year.
Gaza ceasefire talks continue; Hamas demands international guarantees for implementation
On the 8th, a new round of ceasefire negotiations in the Gaza Strip between the Palestinian Islamic Resistance Movement (Hamas) and Israel continued in Sharm el-Sheikh, Egypt. According to Qatar's Al Jazeera and other media outlets, during the previous day's negotiations, Hamas made several demands: first, that Israel completely end its occupation of the Gaza Strip, which must be internationally guaranteed; and second, that the release of Israeli detainees be tied to the timing of Israel's full withdrawal. Israeli officials have not yet commented on the progress of the negotiations. The day before, Hamas's chief negotiator, Khalil Haya, stated in an interview with Cairo News TV in Egypt that the Hamas delegation came to Egypt with a clear goal: to immediately end the conflict, ensure Israel's withdrawal from the Gaza Strip, and reach an agreement on the exchange of detainees. He emphasized that Israel must completely end its occupation of the Gaza Strip, and this must be "genuinely guaranteed" by the ceasefire mediators. (CCTV News)
U.S. Capitol Hill: Budget deficit for last fiscal year was $1.8 trillion
The Congressional Budget Office (CBO) projects a $164 billion budget surplus for September. The budget deficit for fiscal year 2025 (the 12 months ending September 30) is projected to be $1.809 trillion, compared to a deficit of $1.817 trillion in fiscal year 2024. Revenue is projected to grow 6% to $5.22 trillion in fiscal year 2025, while spending is projected to increase 3% to $7.035 trillion.
Fed minutes cautiously hint at further rate cuts this year
Federal Reserve officials are increasingly divided over the future path of interest rates, but most believe that further rate cuts are necessary this year. The minutes of the Fed's September meeting released on Wednesday showed that the committee is grappling with conflicting economic signals and struggling to reach a consensus on which is the most pressing issue: stubborn inflation or a weak labor market. The minutes showed that Fed officials agreed that one rate cut was necessary given recent weak employment data, but officials disagreed on the future path. However, the minutes showed that "most people believed that further easing of policy might be appropriate for the remainder of the year." However, some policymakers "noted that, judging by several indicators, financial conditions suggested that monetary policy was not particularly restrictive, and they believed that a cautious approach was necessary." According to the September forecast, 10 Fed officials hinted that they expected two more rate cuts this year, while nine believed that there should be one or fewer rate cuts.
Zakharova: Russia will respond strongly if EU transfers frozen Russian assets to Ukraine
On the 8th local time, Russian Foreign Ministry spokeswoman Zakharova stated that if the EU transfers frozen Russian assets to Ukraine, Russia will respond strongly. She also stated that if the United States provides Tomahawk missiles to Ukraine, it will cause irreparable damage to Russian-US relations. (CCTV News)
The German government raised its economic growth forecast for 2025 and expects growth to accelerate further next year
According to updated government forecasts, Germany's economy is expected to grow slightly by 0.2% this year, but growth is expected to accelerate to 1.3% in 2026, supported by tens of billions of euros in fiscal stimulus. Economy Minister Katherina Reiche's latest semi-annual forecast, released on Wednesday, is slightly more optimistic than the previous government's projections in April and in line with the outlook of Germany's leading economic research institutes. Reiche acknowledged that a "large part" of economic growth in the coming years will come from a surge in government spending, but warned that the effectiveness of the stimulus measures "depends on whether investments can be quickly implemented."
IMF President: Asset valuations approaching levels seen during the dot-com boom 25 years ago
IMF Managing Director Kristalina Georgieva said rising demand for gold suggests "the global economy's resilience has yet to be fully tested." She also noted that monetary gold holdings now exceed one-fifth of global official foreign exchange reserves. She also warned of "loose financial conditions," but did not specifically mention any particular market or country. Major US stock indices hit record highs this month, driven by the boom in artificial intelligence and rising share prices of technology companies. "Asset valuations are now approaching levels last seen during the dot-com boom 25 years ago," she said. "A significant market correction could tighten financial conditions, potentially dragging down global growth and exposing potential risks, particularly in developing countries." Georgieva added that loose financial conditions "are masking, not reversing, some of the weakening trends, as evidenced by the slowdown in job creation." Regarding the US, she said a range of measures are needed to address the federal budget deficit, including "sustained action beyond discretionary spending" and policies to encourage household savings, such as expanding tax breaks for retirement savings.
Bank of England warns: AI stock bubble could trigger a "sudden correction" in global stock markets
The Bank of England warned that soaring valuations of artificial intelligence companies, after reaching levels comparable to those during the dot-com bubble, are increasing the risk of an "abrupt pullback" in global financial markets. The Bank of England noted that recent defaults in the US auto loan market have heightened the risk of a market reversal, saying these developments "confirm some of the risks to the market-based financial system that the Bank has consistently highlighted." Other risks include escalating political pressure on the Federal Reserve, which "could lead to a sharp repricing of US dollar assets," and uncertainty stemming from political deadlocks in France and Japan, which could also disrupt debt markets. The Bank of England stated that several indicators suggest that "stock market valuations appear stretched, particularly for AI-focused technology companies." "This, combined with the growing concentration of stocks in market indices, makes stock markets particularly vulnerable if market expectations about the impact of AI turn pessimistic." This is the Bank of England's clearest warning yet about the potential bursting of an AI-driven market bubble. In its July Financial Stability Report, the Bank of England only mentioned AI from the perspective of the risks associated with its use by financial institutions.
Highway charging capacity hits new high, green travel drives surge in charging demand
During the holidays, more and more tourists are choosing new energy vehicles, and charging stations in major service areas and scenic spots are also operating at full capacity. The reporter learned from the State Grid today that in the seven days before the holiday, the charging volume of new energy vehicles on domestic highways exceeded 61.85 million kWh, setting a historical record. On Meizhou Island in Putian, Fujian, 150,000 tourists visited the island in the seven days before this year's National Day and Mid-Autumn Festival holiday. According to statistics from the local power department, as of October 7, the average daily charging volume of charging piles around the Meizhou Island scenic area reached 7,400 kWh, a year-on-year increase of 30%, and 4.6 times that of weekdays. Data shows that the number of searches for charging stations on national highways on the day of the Mid-Autumn Festival increased by more than 12.5% year-on-year, and from October 1 to 7, the year-on-year increase exceeded 25%. (CCTV Finance)
Focus on the day
stock market
U.S. stocks closed higher on Wednesday, boosted by technology shares, as investors turned their attention to the minutes of the Federal Reserve's latest policy meeting for clues on the interest rate outlook due to the lack of economic data caused by the U.S. government shutdown.
The tech-heavy Nasdaq led the gains, driven by large-cap companies related to artificial intelligence, which have been the primary drivers of the market's gains this year. The S&P 500 and Nasdaq both hit record closing highs, while the Dow was essentially flat.
Chip stocks outperformed particularly well, while energy, consumer staples and homebuilders lagged.A report from the Mortgage Bankers Association (MBA) showed that demand for homebuy loans fell 4.7% last week despite a retreat in interest rates.
Bill Merz, head of capital markets research at Bank of America, said, “The market theme remains aggressive growth, with AI-related deals being announced one after another and anything that touches AI receiving significant attention.
As AI continues to be popular, rising domestic and geopolitical uncertainties in the United States have pushed gold prices above $4,000 per ounce, prompting investors to buy gold to hedge risks.
Merz added that over the past few years, we have seen that stocks and safe-haven assets can rise simultaneously, partly due to this dual reality: on the one hand, fundamentals currently support higher-than-normal valuations, and on the other hand, deficit spending must be financed by new debt.
The U.S. government shutdown has entered its eighth day. The deadlock in Congress means that market participants will lack official economic indicators in the short term, and the market can only wait for clues from the third-quarter earnings season starting next week.
In the absence of data, investors are focused on third-quarter earnings season, which begins next week, and minutes from the Federal Open Market Committee's September meeting for signs of further interest rate cuts from the Fed.
The minutes showed that the FOMC was divided, with policymakers expressing concern about rising labor market risks but remaining vigilant about inflation. Although "most policymakers believed that further easing of policy would probably be appropriate for the rest of the year," the timing and pace of further action remained uncertain.
Zachary Hill, head of portfolio management at Horizon Investments, said the current discussion is focused on how far the Fed can cut interest rates and whether policy remains restrictive. More broadly, the Fed's already difficult job is complicated by the lack of public sector economic data as the government shutdown continues.
Financial markets are currently pricing in a 92.5% chance that the Fed will cut interest rates by a quarter percentage point at the end of this month's policy meeting, scheduled for Oct. 29.
The Dow Jones Industrial Average fell 0.00% to 46,601.78 points; the S&P 500 rose 0.58% to 6,753.72 points; and the Nasdaq rose 1.12% to 23,043.38 points.
Among the 11 major sectors of the S&P 500, technology stocks .SPLRCT led the gains, while energy stocks .SPNY suffered the biggest declines.
Surging gold prices boosted U.S.-listed gold miners Newmont and Gold Fields, with shares rising 1.7% and 3.7%, respectively. Dell surged 9.1% after several brokerages raised their price targets. AMD jumped 11.4%, marking its third consecutive day of gains. The chipmaker's shares have risen more than 43% this week.
Gold Market
Gold prices broke through $4,000 an ounce for the first time on Wednesday, extending their record-breaking rally as investors flocked to the safe-haven asset amid growing geopolitical and economic uncertainty and expectations of U.S. interest rate cuts.
Silver prices also hit a record high on the same day, driven by the continuous rise in gold prices, attracting investors to buy.
Spot gold rose 1.7% to $4,050.24 per ounce, while U.S. December gold futures settled 1.7% higher at $4,070.5. Spot silver rose 3.2% to $49.35 per ounce, briefly hitting an all-time high of $49.57.
Matthew Piggott, head of gold and silver at Metals Focus, said the strong performance of gold prices reflects that the current macroeconomic and geopolitical background is extremely favorable for safe-haven assets, and also reflects the market's concerns about other traditional safe-haven assets.
Following a 27% gain in 2024, gold prices have risen 52% so far this year, making it one of the best-performing assets in 2025, outperforming global equities while the dollar and crude oil have fallen. Silver prices have risen 71% so far this year, benefiting from the same bullish factors as gold, while tight supply in the spot market has also provided support.
The rise in gold and silver prices is due to the resonance of multiple factors, including expectations of US interest rate cuts, rising political and economic uncertainties, strong buying by central banks around the world, increased ETF inflows and a weakening US dollar.
Piggott added, "Given that these factors will persist until 2026, we currently do not see a catalyst for a significant correction in gold prices. Therefore, we expect gold prices to continue to rise this year and are expected to challenge the $5,000 per ounce mark."
According to the World Gold Council (WGC), global gold ETFs have seen inflows of $64 billion so far this year, with a monthly record of $17.3 billion in September alone. Analysts point out that the fear of missing out (FOMO) is also fueling this rally.
From a technical perspective, gold’s relative strength index (RSI) has reached 88, indicating that the asset is overbought.
HSBC on Wednesday raised its average silver price forecasts for 2025 and 2026 to $38.56 and $44.50 an ounce, respectively, citing high gold prices, recovering investor demand and expectations of higher trading volatility.
The rally also spread to other precious metals. Platinum rose 2.8% to $1,660.78 an ounce, while palladium rose 7.2% to $1,434.25 an ounce, its highest level since June 2023.
Oil Market
Oil prices rose more than 1% on Wednesday to a one-week high as traders expected a lack of progress on a Ukraine peace deal to keep sanctions on Russia in place, while a weekly report showed rising U.S. oil consumption.
Brent crude futures rose 1.2% to close at $66.25 a barrel, while U.S. crude rose 1.3% to $62.55. This was Brent's highest close since September 30 and U.S. crude's highest close since September 29.
A senior Russian diplomat said momentum for a peace deal with Ukraine has largely run out. Analysts say a peace deal could allow more Russian oil to flow to global markets. U.S. energy data shows Russia will be the world's second-largest crude oil producer after the United States in 2024.
Russian Deputy Prime Minister Alexander Novak said on Wednesday that Russia is gradually increasing its oil production despite sanctions and was close to reaching its OPEC+ production quota last month, Interfax reported.
Russia's energy sector has been under severe pressure over the past two months due to waves of drone attacks in Ukraine, mainly targeting refineries.
Crude oil futures were also supported by investor expectations that the Federal Reserve will continue to cut interest rates. Investors have been deprived of most U.S. economic data during the U.S. government shutdown.
Federal Reserve officials agreed at their latest policy meeting that risks to the U.S. job market had grown enough to warrant a rate cut, but many policymakers remained wary of high inflation, minutes from the Sept. 16-17 meeting showed.
The Fed is widely expected to cut interest rates by 25 basis points at its October 28-29 meeting, according to the Chicago Mercantile Exchange Group's (CME) FedWatch tool. A rate cut could boost economic growth and oil demand.
Oil markets held onto gains as traders focused more on a U.S. report showing increased oil consumption last week than on a bigger-than-expected build in crude inventories.
The U.S. Energy Information Administration (EIA) reported that energy companies increased crude oil inventories by 3.7 million barrels in the week ending October 3. This was higher than analysts' forecasts for a 1.9 million-barrel increase and higher than the 2.8 million-barrel increase in crude oil inventories reported last week by market sources on Tuesday, citing data from the American Petroleum Institute (API). However, the EIA also stated that total weekly petroleum product supplies, representing U.S. oil consumption, rose to 21.99 million barrels per day last week, the highest level since December 2022.
foreign exchange market
The yen hit its lowest since mid-February against the dollar on Wednesday as concerns grew about increased fiscal spending in Japan, while the euro fell due to uncertainty in French politics.
With the U.S. federal government still under shutdown, the dollar could benefit from a lack of government economic data that would otherwise exacerbate market volatility and potentially point to a weakening economy, analysts said.
Sanae Takaichi's unexpected victory in Japan's ruling party leadership election over the weekend hit the yen on expectations of increased government stimulus.
“The market believes that the Kaohsiung government will adopt policies more similar to those of the Abenomics era,” said Vassili Serebriakov, a foreign exchange and macro strategist at UBS. “In other words, expansionary fiscal policy and relatively loose monetary policy. But at this point, the specific policy is obviously still unknown.”
The dollar was last up 0.53% against the yen at 152.7 yen, having earlier hit 152.99, its highest since February 14, up from 147.44 on Friday. The dollar was boosted by a lack of U.S. government economic data that could have signaled a slowdown.
Minutes of the Federal Reserve's September meeting released on Wednesday showed officials agreed that risks to the U.S. job market had increased enough to support an interest rate cut, but many remained wary of high inflation.
CME's FedWatch tool shows that traders generally expect the Federal Reserve to cut interest rates by 25 basis points at its October 28-29 meeting, with a 78% probability of another rate cut in December. The euro fell 0.33% against the dollar to $1.1616 in late New York trading, having earlier hit $1.1597, its lowest level since August 27.
France's caretaker Prime Minister Jean-Marie le Corny said on Wednesday that a deal on the 2026 budget could finally be reached despite the political crisis.
Le Corny, France's fifth prime minister in two years, resigned and resigned just hours after announcing his cabinet on Monday, resulting in the shortest-serving government in modern French history. He said on Wednesday that President Emmanuel Macron might nominate a new prime minister within the next 48 hours, sending the euro paring losses.
The New Zealand dollar fell 0.33% to $0.5779 against the U.S. dollar, having earlier hit $0.5735, its lowest since April 11. The Reserve Bank of New Zealand unexpectedly cut interest rates by a massive 50 basis points and signaled further easing measures in the face of recent deteriorating economic data.
International News
The U.S. Senate again failed to pass a bill to fund the government and end the shutdown
The US Senate again rejected a draft bill for temporary government funding, sending the Trump administration shutdown into its second week. The Democratic-backed bill failed by a 47-52 vote around 12:50 PM ET. A vote on the Republican version took place shortly thereafter. These closely contested stopgap measures have failed in five previous votes. Democrats want any funding bill to include health care, specifically extending subsidies for Obamacare, which are set to expire at the end of the year.
Gaza ceasefire talks continue; Hamas demands international guarantees for implementation
On the 8th, a new round of ceasefire negotiations in the Gaza Strip between the Palestinian Islamic Resistance Movement (Hamas) and Israel continued in Sharm el-Sheikh, Egypt. According to Qatar's Al Jazeera and other media outlets, during the previous day's negotiations, Hamas made several demands: first, that Israel completely end its occupation of the Gaza Strip, which must be internationally guaranteed; and second, that the release of Israeli detainees be tied to the timing of Israel's full withdrawal. Israeli officials have not yet commented on the progress of the negotiations. The day before, Hamas's chief negotiator, Khalil Haya, stated in an interview with Cairo News TV in Egypt that the Hamas delegation came to Egypt with a clear goal: to immediately end the conflict, ensure Israel's withdrawal from the Gaza Strip, and reach an agreement on the exchange of detainees. He emphasized that Israel must completely end its occupation of the Gaza Strip, and this must be "genuinely guaranteed" by the ceasefire mediators. (CCTV News)
U.S. Capitol Hill: Budget deficit for last fiscal year was $1.8 trillion
The Congressional Budget Office (CBO) projects a $164 billion budget surplus for September. The budget deficit for fiscal year 2025 (the 12 months ending September 30) is projected to be $1.809 trillion, compared to a deficit of $1.817 trillion in fiscal year 2024. Revenue is projected to grow 6% to $5.22 trillion in fiscal year 2025, while spending is projected to increase 3% to $7.035 trillion.
Fed minutes cautiously hint at further rate cuts this year
Federal Reserve officials are increasingly divided over the future path of interest rates, but most believe that further rate cuts are necessary this year. The minutes of the Fed's September meeting released on Wednesday showed that the committee is grappling with conflicting economic signals and struggling to reach a consensus on which is the most pressing issue: stubborn inflation or a weak labor market. The minutes showed that Fed officials agreed that one rate cut was necessary given recent weak employment data, but officials disagreed on the future path. However, the minutes showed that "most people believed that further easing of policy might be appropriate for the remainder of the year." However, some policymakers "noted that, judging by several indicators, financial conditions suggested that monetary policy was not particularly restrictive, and they believed that a cautious approach was necessary." According to the September forecast, 10 Fed officials hinted that they expected two more rate cuts this year, while nine believed that there should be one or fewer rate cuts.
Zakharova: Russia will respond strongly if EU transfers frozen Russian assets to Ukraine
On the 8th local time, Russian Foreign Ministry spokeswoman Zakharova stated that if the EU transfers frozen Russian assets to Ukraine, Russia will respond strongly. She also stated that if the United States provides Tomahawk missiles to Ukraine, it will cause irreparable damage to Russian-US relations. (CCTV News)
The German government raised its economic growth forecast for 2025 and expects growth to accelerate further next year
According to updated government forecasts, Germany's economy is expected to grow slightly by 0.2% this year, but growth is expected to accelerate to 1.3% in 2026, supported by tens of billions of euros in fiscal stimulus. Economy Minister Katherina Reiche's latest semi-annual forecast, released on Wednesday, is slightly more optimistic than the previous government's projections in April and in line with the outlook of Germany's leading economic research institutes. Reiche acknowledged that a "large part" of economic growth in the coming years will come from a surge in government spending, but warned that the effectiveness of the stimulus measures "depends on whether investments can be quickly implemented."
IMF President: Asset valuations approaching levels seen during the dot-com boom 25 years ago
IMF Managing Director Kristalina Georgieva said rising demand for gold suggests "the global economy's resilience has yet to be fully tested." She also noted that monetary gold holdings now exceed one-fifth of global official foreign exchange reserves. She also warned of "loose financial conditions," but did not specifically mention any particular market or country. Major US stock indices hit record highs this month, driven by the boom in artificial intelligence and rising share prices of technology companies. "Asset valuations are now approaching levels last seen during the dot-com boom 25 years ago," she said. "A significant market correction could tighten financial conditions, potentially dragging down global growth and exposing potential risks, particularly in developing countries." Georgieva added that loose financial conditions "are masking, not reversing, some of the weakening trends, as evidenced by the slowdown in job creation." Regarding the US, she said a range of measures are needed to address the federal budget deficit, including "sustained action beyond discretionary spending" and policies to encourage household savings, such as expanding tax breaks for retirement savings.
Bank of England warns: AI stock bubble could trigger a "sudden correction" in global stock markets
The Bank of England warned that soaring valuations of artificial intelligence companies, after reaching levels comparable to those during the dot-com bubble, are increasing the risk of an "abrupt pullback" in global financial markets. The Bank of England noted that recent defaults in the US auto loan market have heightened the risk of a market reversal, saying these developments "confirm some of the risks to the market-based financial system that the Bank has consistently highlighted." Other risks include escalating political pressure on the Federal Reserve, which "could lead to a sharp repricing of US dollar assets," and uncertainty stemming from political deadlocks in France and Japan, which could also disrupt debt markets. The Bank of England stated that several indicators suggest that "stock market valuations appear stretched, particularly for AI-focused technology companies." "This, combined with the growing concentration of stocks in market indices, makes stock markets particularly vulnerable if market expectations about the impact of AI turn pessimistic." This is the Bank of England's clearest warning yet about the potential bursting of an AI-driven market bubble. In its July Financial Stability Report, the Bank of England only mentioned AI from the perspective of the risks associated with its use by financial institutions.
Domestic News
Highway charging capacity hits new high, green travel drives surge in charging demand
During the holidays, more and more tourists are choosing new energy vehicles, and charging stations in major service areas and scenic spots are also operating at full capacity. The reporter learned from the State Grid today that in the seven days before the holiday, the charging volume of new energy vehicles on domestic highways exceeded 61.85 million kWh, setting a historical record. On Meizhou Island in Putian, Fujian, 150,000 tourists visited the island in the seven days before this year's National Day and Mid-Autumn Festival holiday. According to statistics from the local power department, as of October 7, the average daily charging volume of charging piles around the Meizhou Island scenic area reached 7,400 kWh, a year-on-year increase of 30%, and 4.6 times that of weekdays. Data shows that the number of searches for charging stations on national highways on the day of the Mid-Autumn Festival increased by more than 12.5% year-on-year, and from October 1 to 7, the year-on-year increase exceeded 25%. (CCTV Finance)
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
