September 23 Financial Breakfast: The intensified conflict between Lebanon and Israel provides good support for gold, and the Reserve Bank of Australia is expected to maintain stability this

(September 23) 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 tension between Lebanon and Israel has intensified, and the Israeli Defense Forces and Lebanese Hezbollah have frequently attacked each other. UN Secretary-General Guterres is worried that Lebanon may become "another Gaza". The Reserve Bank of Australia held an interest rate decision on Tuesday this week, and the market expects to keep the interest rate unchanged.

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Overview of major global markets

1. Precious metals

Federal Reserve Board member Waller said that if the job market deteriorates, it may consider another 50 basis point interest rate cut. The expectation of a 50 basis point interest rate cut by the Federal Reserve in November, coupled with the intensification of armed conflict between Israel and Lebanon, led to a strong rise in spot gold last Friday, once setting a new record high of $2,625/ounce, and finally closing up 1.37% at $2,622.27/ounce. Spot silver finally closed up 1.24% at $31.17/ounce.

BMI analysts said in a report that gold prices should be well supported in the coming months due to a weaker dollar and falling bond yields, as well as increased geopolitical tensions.

2. Crude oil

Dragged down by weak oil demand consumption, international crude oil fluctuated in a range last Friday, but still recorded a second consecutive weekly increase. WTI crude oil finally closed up 0.11% at $71.1 per barrel; Brent crude oil closed slightly down 0.13% at $74.01 per barrel.

3. Foreign exchange

Data showed that US retail sales in August increased by 0.1% month-on-month, lower than the growth rate of 1.1% in July. In addition, after Fed Governor Waller said he might support another 50 basis point rate cut. Last Friday, the US dollar index gave up some of its gains and failed to successfully regain the 101 mark, and finally closed up 0.106% slightly at 100.74.

The Bank of Japan kept its policy unchanged as expected last Friday, and the governor said that the upward risks of inflation were fading. The yen turned lower, and the dollar closed up 0.89% against the yen at 143.89. MUFG said that the yen fell after Bank of Japan Governor Kazuo Ueda said that inflation risks had subsided, but the prospect of further rate hikes should limit any depreciation.

The pound continued to rise against the dollar last Friday, closing up 0.29% at 1.3320. Tim Graff, head of EMEA macro strategy at State Street Bank, said: "I think the pound is living on borrowed time against the dollar. Ultimately, I think the pound will be lower against the dollar in three to six months."

HSBC said that the strength of the pound looks unsustainable because the Bank of England may cut interest rates by more than the market expects, while the Fed's rate cut cycle may be less aggressive than expected.

The Australian dollar closed down 0.1% against the US dollar at 0.6806 last Friday.

The Reserve Bank of Australia will hold an interest rate decision on Tuesday, September 24. Survey: All 45 analysts predict that the Reserve Bank of Australia will keep the cash rate unchanged at 4.35% on September 24.

Diana Mousina, deputy chief economist of AMP Capital, said that the Reserve Bank of Australia does not have to follow the Fed in cutting interest rates. Central banks of all countries must formulate policies based on domestic conditions. It is expected that the Reserve Bank of Australia will start cutting interest rates in February 2025, when inflation data will slow further, which will give the Reserve Bank of Australia the confidence to relax monetary policy.

4. Commodities

LME nickel rose to a nearly three-week high for three consecutive weeks, and LME copper fell from a two-month high, but still rose for two consecutive weeks. LME nickel futures rose 0.84% ​​to $16,470/ton, LME copper futures fell 0.3% to $9,486/ton, up 1.91% for the week; LME aluminum futures fell 2.11% to $2,486/ton, and LME tin futures rose 1.03% to $32,150/ton.

5. Stock Market

China's Shanghai Composite Index closed up 0.79 points on September 20 (last Friday), an increase of 0.03%, at 2736.81 points; China's Shenzhen Component Index closed down 12.46 points on September 20 (last Friday), a decrease of 0.15%, at 8075.14 points; China's CSI 300 Index closed up 5.01 points on September 20 (last Friday), an increase of 0.16%, at 3201.05 points; China's ChiNext Index closed down 9.88 points on September 20 (last Friday), a decrease of 0.64%, at 1536.6 points; China's Science and Technology Innovation 50 Index closed down 3.11 points on September 20 (last Friday), a decrease of 0.48%, at 648.36 points. The concept of Xinchuang rose sharply, and the real estate sector fluctuated and strengthened.

European stocks closed sharply lower, giving up yesterday's gains. Germany's DAX30 index closed at 18721.75 points, down 278.50 points, or 1.47%, on September 20 (last Friday). The UK's FTSE 100 index closed at 8230.51 points, down 98.21 points, or 1.18%, on September 20 (last Friday). France's CAC40 index closed at 7500.26 points, down 115.15 points, or 1.51%, on September 20 (last Friday). The European STOXX 50 index closed at 4872.55 points, down 70.83 points, or 1.43%, on September 20 (last Friday). Spain's IBEX35 index closed at 11752.00 points, down 26.10 points, or 0.22%, on September 20 (last Friday). Italy's FTSE MIB index closed down 297.86 points, or 0.87%, at 33,747.00 points on September 20 (last Friday).

The Dow Jones Index closed up 37.64 points, or 0.09%, at 42,062.83 points on September 20 (last Friday); The S&P 500 closed down 11.11 points, or 0.19%, at 5,702.53 points on September 20 (last Friday); The Nasdaq Composite Index closed down 65.66 points, or 0.36%, at 17,948.32 points on September 20 (last Friday).

6. Bond market

Last Friday, U.S. Treasury yields plunged during the session and eventually closed slightly higher. The benchmark 10-year Treasury yield closed at 3.744%; the two-year Treasury yield, which is more sensitive to monetary policy, closed at 3.614%.

International News

① The Israeli Defense Forces said that the crackdown on Hezbollah will continue and intensify

② The Speaker of the U.S. House of Representatives proposed a new appropriations bill again, planning to "extend the life" of government departments for 3 months

③ The leaders of the United States, India, Japan and Australia called for the reform of the UN Security Council to include new permanent members from Africa, Asia and Latin America

④ Trump rejected Harris's "invitation" to another TV debate and said that he would not run again if he lost the 2024 election

⑤ Source: U.S. Vice President Harris is expected to release a new economic proposal this week, which aims to promote the accumulation of wealth among the middle class and provide economic incentives for companies to support this goal

⑥ India is reportedly planning to impose tariffs on steel imported from the European Union

Domestic News

① The China-U.S. Economic Working Group held its fifth meeting in Beijing

② PetroChina's largest wind power project in Inner Mongolia was successfully put into production

③ Central enterprises will fully establish a "scientific, rational and efficient" board of directors within five years

④ Shanghai Clearing House Green The low-carbon theme bond index is officially released

⑤ China releases the world's first 10 billion-level remote sensing interpretation basic model "Sky and Space Lingmou" 3.0 version

⑥ Yunnan's largest "source-grid-load-storage" new energy cluster project has been completed and put into production

Institutional viewpoint summary

① Huatai Securities: The Federal Reserve has started to cut interest rates, and gold prices may still have room to rise

② Analysts of Gain Capital: Gold prices may not reach $3,000 this year. But it is still expected to be achieved in the long term

③ Commerzbank: As long as the expectation of a sharp interest rate cut continues to exist, the rise in gold should continue

④ UniCredit Bank: The interest rate differential between the United States and other countries is expected to narrow, and the decline of the US dollar is expected to be limited

⑤ Palm oil industry analyst MIELKE: Malaysian palm oil prices will remain between 3,700 and 4,500 ringgit per ton

⑥ Royal Bank of Canada: The risk of fiscal spending after the US election is high, and the room for 2-10 year government bonds to rise is limited

⑦ CITIC Securities: Commodity attributes and financial attributes resonate, and copper prices are revalued at the right time