Next week, the financial markets will see a confluence of multiple themes. US CPI and PPI inflation data, coupled with a flurry of statements from Federal Reserve officials, will directly influence expectations for a December rate hike. Meanwhile, geopolitical events such as the US-Iran standoff, the Russia-Ukraine Abu Dhabi summit, and changes in the Democratic Party's narrative on AI regulatory policies will continue to disrupt risk appetite and dollar pricing, making it a week prone to amplified volatility.

Monday through Friday key events overview

Monday (November 9): China's October CPI and PPI released; Chicago Fed's Goolsby (2027 voting member) speaks. Tuesday (November 10): Domestic M2, social financing, and new RMB loans released; US October CPI and core CPI (most important); Barkin, Logan, and Waller speak; Bank of England's Bailey speaks on central bank independence; Bank of Japan releases summary of opinions from its October meeting; G7 foreign ministers' meeting held, with foreign ministers from Saudi Arabia, Brazil, Ukraine, and other countries in attendance. Wednesday (November 11): US, Russia, and Ukraine meet in Abu Dhabi, a key moment in the Russia-Ukraine negotiations; US API crude oil inventories and 10-year US Treasury auction; Kansas City Fed's Schmid speaks; US Treasury market closed for Veterans Day. Thursday (November 12): Domestic refined oil price adjustment window opens; UK Q3 GDP; Cleveland Fed's Hamak (hard hawk) speaks. Friday (November 13): US October PPI; Goolsby and Daly speak again; New York Fed's Williams (permanent voting member, FOMC third-ranking official) finalizes the Fed's stance for the week. In addition, there are accompanying economic data from the Eurozone, Germany, the UK, and Japan; speeches/meeting minutes from RBA and BRC officials will directly impact commodity currencies like the Australian dollar, New Zealand dollar, and Canadian dollar. Key focus areas for next week:

Geopolitics: The US-Iran standoff continues, with the Russia-Ukraine Abu Dhabi summit being the biggest variable.

In the Middle East, the risk of the Hormuz attack on ships has not been eliminated, and the US-Iran rivalry remains a persistent source of disturbance for crude oil and risk assets, potentially leading to fluctuations in inflation expectations. The bigger focus is on Wednesday's trilateral meeting between the US, Russia, and Ukraine. This meeting serves as a window for negotiations; if it releases signals of easing tensions, risk appetite will quickly rebound, suppressing crude oil and the US dollar while benefiting gold. However, if negotiations fail to make substantial progress or even escalate tensions, energy premiums will rise again, inflation expectations will rebound, and interest rate hike pricing will be pushed up again, benefiting the US dollar. Geopolitical factors will dominate asset pricing throughout the week.

AI Regulatory Narrative: Observing Whether Democratic Party Policy Stance Has Eased

The trigger for this round of Nasdaq plunge was the market's trading of stronger regulations for AI infrastructure and the chip industry following the Democratic victory in both the House and Senate. Next week, we will focus on the public statements of officials and lawmakers: if the Democrats signal a slowdown in the pace of regulatory implementation and avoid blanket restrictions on AI investment, the sell-off in tech stocks will likely come to a temporary halt, risk appetite will recover, which would be bearish for the US dollar and bullish for growth assets. Conversely, if the tough regulatory rhetoric continues, expectations for AI capital expenditure will continue to be revised downwards, the market will price a lower long-term growth center in the US, and real interest rate expectations will decline, which would be bullish for gold and non-US currencies.

US inflation data: a key indicator of the probability of a December rate hike.

Tuesday's CPI and core CPI, and Friday's PPI, are the key data releases for next week, directly verifying the Fed's assessment of "sticky inflation." A higher-than-expected core CPI strengthens expectations of an inflation rebound, coupled with previous calls from officials like Hamak to shift to restrictive monetary policy, leading the market to re-escalate the probability of a December rate hike, boosting the dollar and suppressing gold and non-US currencies. A significantly cooled core CPI disproves the "sticky inflation" theory, causing a correction in previous hawkish expectations and putting pressure on the dollar. The PPI, on the other hand, is used to observe the pressure of upstream industrial product price transmission and is strongly correlated with crude oil and energy prices.

A flurry of speeches from Federal Reserve officials: their views cross-validate each other, with Williams's closing remarks setting the tone.

The voting committee for the week was well-rounded, covering diverse viewpoints: Barkin was neutral to hawkish, Logan and Hamak were hard hawks, Goolsby and Daly held relatively moderate positions, and permanent voting member Williams concluded the week with a summary. The market doesn't rely on a single committee member, but rather on the consistency of the overall stance: if multiple officials unanimously emphasize persistent inflation and support continued interest rate hikes, then even if CPI is temporarily moderate, interest rate expectations will lean hawkish; if officials begin to diverge, with some members mentioning the risk of an economic slowdown, hawkish expectations will cool. Meanwhile, China's CPI, credit, and social financing data will also influence expectations for the RMB and commodity currencies.

Summarize

Next week's forex market will be driven by a combination of data, geopolitical impulses, and policy narratives. Baseline scenario: First, observe Tuesday's CPI results; inflation stickiness is key to the dollar's strength. The Russia-Ukraine summit and the US-Iran situation are high-frequency disturbances, prone to rapid intraday swings. The AI regulatory narrative will determine the risk appetite of US tech stocks, indirectly affecting real interest rates. Risk scenario: If oil prices surge again due to geopolitical factors, energy inflation resurfaces, and Fed officials collectively turn hawkish, the dollar will strengthen again.