Sou Hu Cai Jing·2025-11-11 10:29Market Overview - The US dollar index rebounded to 99.55 in October, with a monthly increase of 1.76%. Most non-USD currencies declined, except for the ruble and the ringgit, while gold hit a yearly high before retracing, and commodity prices mostly fell [1]. Economic Data - US inflation data showed a lower-than-expected CPI of 3% year-on-year for September, compared to the expected 3.1%. Core CPI increased by 0.3% month-on-month, below the anticipated 0.4% [4]. - The labor market outlook is concerning, with September's non-farm employment and unemployment rate data delayed due to the government shutdown. The ADP employment report showed a decrease of 32,000 jobs, significantly below the expected increase of 52,000 [5]. - Consumer confidence continues to decline, with the University of Michigan's consumer sentiment index for October at 53.6, below the expected 55, marking a fourth consecutive month of decline [5]. - Manufacturing showed signs of recovery, with the S&P Global Manufacturing PMI for October at 52.5, up from 52.2 previously [5]. Federal Reserve Actions - The Federal Reserve lowered the federal funds rate target range by 25 basis points in October, from 4%-4.25% to 3.75%-4%. There were internal divisions regarding future rate cuts, with Chairman Powell indicating that a December rate cut is not guaranteed due to missing economic data from the government shutdown [10][11]. - The market's expectations for a December rate cut have diminished, with the Fed's hawkish stance providing support for the dollar [10]. Currency Performance - The euro weakened in October, failing to maintain its strength from September, dropping from a high of 1.1733 to 1.1534 by month-end, breaking below an upward channel formed since April 2025 [16]. - The Japanese yen faced pressure, with USDJPY rising 4.7% in October, reaching a high of 153.99, driven by expectations of delayed interest rate hikes from the Bank of Japan [19][20]. - The British pound also declined, down 2.2% in October, influenced by weak economic data and increased expectations for a rate cut from the Bank of England in December [23][24]. - The Malaysian ringgit showed resilience, with a GDP growth of 5.2% in Q3 and a trade surplus of 19.9 billion ringgit, despite external pressures [29][30]. Commodity Prices - Commodity prices generally fell, with notable declines in energy prices such as Brent crude oil down 0.60% and natural gas prices fluctuating [4]. - Gold prices retraced after reaching a yearly high, while other commodities like iron ore and steel also saw declines [4]. Outlook - The US economy may face a challenging environment with persistent labor market weakness and rising inflation pressures due to tariffs, leading to a potential stagflation scenario [14]. - The euro is expected to remain under pressure, with a forecasted trading range of 1.14 to 1.18 in November [16]. - The Japanese yen may continue to weaken if US economic data remains strong or if Japan's fiscal stimulus exceeds expectations, with a projected range of 151 to 158.5 for USDJPY in November [20]. - The British pound is likely to remain weak, with a trading range of 1.27 to 1.34 anticipated for November [24]. - The Malaysian ringgit is expected to continue its range-bound movement, with a forecasted range of 4.15 to 4.30 for USD/MYR [30].