Financial Breakfast on October 21: The continued tension in the Middle East boosted gold prices, and the Bank of Japan may not raise interest rates this month

(October 21) Financial breakfast, including important fundamental news, precious metals/crude oil/foreign exchange/commodities/stock market/bond market, international news, domestic news, institutional views, today's important financial data and financial events. The tense situation in the Middle East continues to boost gold prices. Citi believes that it is expected to rise to $3,000 in the next 6-12 months. Sources said that Japanese central bank officials do not think it is necessary to rush to raise interest rates this month. This week, we need to pay attention to the speeches of several Fed officials, as well as US PMI data and durable goods orders.

Overview of major global markets

1. Precious metals

Last Friday, spot gold once refreshed its historical high to $2,722/ounce, and finally closed up 1.08% at $2,721.64/ounce. Spot silver rose 6.41% to $33.72/ounce.

The continued tension in the Middle East boosted gold prices. The Israeli army launched a new round of air strikes on Lebanon, and Hezbollah fought back; Israel's energy minister said that all plans to deal with Iran are on the table, including strikes on nuclear facilities.

Max Layton, head of global commodity research at Citigroup, predicts that gold prices are expected to climb to $3,000 per ounce in the next 6 to 12 months. Against the backdrop of greater uncertainty in the U.S. and European economies, gold, as a hedge, is expected to see stronger demand for ETFs and investments. Layton further pointed out that silver prices are expected to rise significantly to $35 per ounce in the next three months.

2. Crude oil

Due to market concerns about global demand prospects and other factors, oil prices continued to fall last Friday, with WTI crude oil closing down 1.94% at $68.79 per barrel; Brent crude oil closed down 1.74% at $72.87 per barrel.

3. Foreign exchange

Last Friday, the U.S. dollar index fell after a continuous rise, but remained above the 103 mark, and finally closed down 0.3% at 103.47. Francesco Pesole, an analyst at ING Group, pointed out in his report that if the market does not expect the Fed to further cut interest rates, the U.S. dollar will be more likely to be strong in the short term.

Last Friday, the pound closed up 0.28% against the dollar at 1.3047. Tomasz Wieladek, chief European economist at T. Rowe Price, pointed out that given the better-than-expected retail sales data in the UK in September, the Bank of England needs to be cautious in deciding the extent of the interest rate cut.

Last Friday, the euro rebounded from a low against the dollar, closing up 0.33% at 1.0866. Sources said that at last week's meeting, some ECB officials wanted to abandon their commitment to maintain a tight policy.

4. Commodities

Last Friday, London aluminum closed up 2.25% at $2,613.50/ton; London copper closed up 1.33% at $9,625.50/ton; London tin closed down 0.2% at $31,291/ton.

5. Stock market

Last Friday, the Shanghai Composite Index rose 2.91%, the Shenzhen Component Index rose 4.71%, and the ChiNext Index rose 7.95%. The sectors rose across the board, and the semiconductor sector saw a surge in daily limit.

Last Friday, the German DAX30 index closed up 0.38%; the British FTSE 100 index closed down 0.32%; and the European STOXX 50 index closed up 0.79%.

Last Friday, the Dow Jones Industrial Average rose slightly by 36.86 points, or 0.09%, to 43,275.91 points. On the same day, the S&P 500 index also rose, increasing by 23.20 points, or 0.40%, to close at 5,864.67 points. The Nasdaq index also performed positively, rising by 115.94 points, or 0.63%, to close at 18,489.55 points.

6. Bond market

Last Friday, the benchmark 10-year U.S. Treasury yield closed at 4.0820%; the two-year Treasury yield, which is more sensitive to monetary policy, closed at 3.9650%.

International News

①Source: Bank of Japan officials believe there is no need to rush to raise interest rates this month

②EU chief diplomat calls for ceasefire in the Middle East after Sinwar's death; Israeli army launches new round of air strikes on Lebanon, Hezbollah strikes back,

③Israel claims its response to Iran's missile attack is "set in stone"; Israel's energy minister says all options for dealing with Iran are on the table, including strikes on nuclear facilities

④According to officials from South Korea's finance ministry, the government is planning to launch night trading sessions in the Treasury futures market in the first half of 2025

⑤Libya's Acacus Oil Company announced that the average daily oil production of the Sharara oil field reached 274,365 barrels

⑥The Canadian government opens applications for tariff reductions on electric vehicles and metal products from China

⑦The depreciation of the yen boosts tourism, with tourist spending in Japan exceeding last year's in the first nine months of this year

⑧France's economic prospects in doubt, Scope Ratings lowered its credit rating

⑨ News: US Secretary of State Blinken is expected to visit Israel on Tuesday as part of a trip to the Middle East

Domestic News

① At the 2024 Financial Street Forum Annual Meeting, Lu Lei, deputy governor of the People's Bank of China, emphasized the importance of accelerating the revision of key laws such as the People's Bank of China Law and the Financial Stability Law

② Industrial and Commercial Bank of China, Bank of Communications, and China Merchants Bank have lowered the RMB time deposit interest rate by 25 basis points since Friday

③ my country has successfully developed high-efficiency organic stacked solar cells

④ Beijing has built a 3,000 square kilometer autonomous driving demonstration zone

⑤ Zimbabwe plans to legislate to restrict foreigners from participating in small-scale mining

⑥ Sinopec receives loan support from major shareholders for increased holdings

⑦ News: US Secretary of State Blinken is expected to visit Israel on Tuesday as part of a trip to the Middle East

Institutional Views Summary

① UBS predicts: Brent crude oil prices will reach $87 per barrel by June 2025

② Goldman Sachs predicts in its latest research report that the Bank of England may take more rapid interest rate cuts. Based on the latest inflation and wage statistics, as well as the Bank of England's recent comments, the market generally expects a 25 basis point rate cut in November.