Core Viewpoint - The Federal Reserve is experiencing a significant internal debate regarding the current economic conditions and the associated risks, particularly as it approaches its next policy meeting amid a government shutdown that has halted data releases [1]. Group 1: Policy Debate and Economic Conditions - Fed Governor Lisa Cook highlighted the conflicting risks to employment and inflation, suggesting that the upcoming December meeting remains a possibility for a rate cut, but it is not guaranteed [2]. - Cook expressed concerns that maintaining high rates could negatively impact the labor market, although it remains solid for now, while also warning that excessive rate cuts could destabilize inflation expectations [3]. - The dual mandate of the Fed is under tension, prompting Cook to closely monitor labor market and inflation data [3]. Group 2: Internal Division Among Fed Officials - A notable split among Fed officials was evident from a recent 10-2 policy vote to lower the benchmark interest rate to the 3.75%-4.00% range, marking only the third instance of dissenting opinions for both tighter and looser monetary policy since 1990 [4]. - Fed Chair Jerome Powell acknowledged the deep divide in opinions regarding future actions, indicating that another rate cut at the December meeting is not assured [5]. - Fed Governor Stephen Miran reiterated his support for significant interest rate cuts, arguing that strong stock and corporate credit markets do not imply that monetary policy is overly accommodative [5].

By Howard Schneider WASHINGTON (Reuters) -Federal Reserve officials on Monday continued pressing competing views of where the economy stands and the risks facing it, a debate set to intensify ahead of the U.S. central bank's next policy meeting and in the absence of data suspended due to the federal government shutdown. In her first public remarks since President Donald Trump launched a so-far unsuccessful attempt to remove her from her position, Fed Governor Lisa Cook laid out her view of the policy deb ...

Core Viewpoint - The US Dollar Index increased despite a 25-basis-point rate cut, indicating that the cut was anticipated prior to the decision, while Chair Powell's comments shifted the policy outlook to a more data-dependent approach [1] Currency Movements - DXY approached a significant resistance level, with EUR/USD and GBP/USD declining towards recent lows; USD/JPY gained further as the BoJ did not indicate imminent rate hikes [2] - Commodity currencies showed mixed performance, with CAD benefiting from stronger crude prices and a resilient US risk tone, while AUD and NZD lagged due to cautious sentiment in Asia [2] Market Signals - Cross-asset signals supported the dollar's strength, with US equities achieving a third consecutive weekly gain and closing a sixth positive month, driven by strong performances from major companies like Alphabet and Amazon [3] - The trade war climate improved following President Trump's trip to Asia and a truce on rare earths/minerals with President Xi [3] Currency Pairs Analysis - EUR/AUD is forming a broadening megaphone pattern, potentially indicating a long-term top, with a recent lower high and a retest of previous lows; a break below 1.75600 could signal sustained weakness [4][6] - AUD/SGD has rebounded from 0.83420 support and is testing previous resistance at 0.55520; a breakout could lead to a medium-term rally towards 0.87260 [7][9] Economic Indicators and Outlook - The ongoing government shutdown affects near-term economic indicators, with focus on ISM surveys, FED speeches, and ADP data; Powell's comments on a December cut suggest that a strong ISM report could bolster dollar strength and pressure EUR/USD towards October lows [10] - Upcoming economic events include US ISM manufacturing and services, ADP data, CHF CPI, and central bank meetings for RBA and BoE, with traders closely monitoring AUD and GBP for potential volatility [11]

Crypto markets plunged almost 5% on Monday, shaving about $182 billion of the total market’s value as Bitcoin fell to $105,540. Both the overall market and the main cryptocurrency have recovered slightly. They are now worth $3.6 trillion and $107,149, respectively. While it’s unclear what triggered this latest sharp decline, it comes on the back of US Federal Reserve Chair Jerome Powell signalling last week that a December interest rate cut is not a foregone conclusion. This “dampened investors’ expecta ...

Core Insights - Bitcoin's price reached $100,000 despite a 3.7% decline, marking its worst performance since 2018, amid increased volatility and ETF outflows [1][2] - US spot Bitcoin ETFs experienced significant outflows of $488 million and $191 million over two days, indicating a shift in capital away from traditional Bitcoin financial products [2] - The market is currently fluctuating within a defined range, with traders looking for a breakout above $116,000 or below $107,000, as Bollinger Bands indicate extreme volatility levels [3] Market Sentiment - Investor sentiment remains cautious despite an anticipated interest rate cut from the US Federal Reserve, with concerns that a weekly close below $100,000 could confirm a downtrend [4] - The initial rally following the Fed's rate cut faded, leading to a more cautious trading environment, particularly reflected in the options market [4] Historical Trends - Historically, November has been a strong month for Bitcoin, averaging gains of over 42% since 2013, suggesting potential for upward movement in the near term [5]

Core Insights - October, typically a strong month for Bitcoin, has seen a significant downturn, breaking a six-year streak of gains with a 3.69% drop from the start to the end of the month [2] - Bitcoin's price recently fell to $109,820, approximately 13% below its record high of $126,080 set on October 6, and has declined over 8% in the past 30 days [1][2] Market Conditions - The decline in Bitcoin's value occurred amidst challenging macroeconomic conditions, including concerns about liquidity and the reduced likelihood of a third interest rate cut, as indicated by U.S. central bank Chair Jerome Powell [3] - The market experienced a significant sell-off, with investors liquidating over $19 billion in positions, predominantly long positions, following escalated trade tensions between the U.S. and China [4] Contributing Factors - The negative performance in October is attributed to three main factors: a macroeconomic shock, a fragile internal market structure, and a lukewarm monetary policy signal [5] - Analysts noted that tightening liquidity conditions are impacting Bitcoin more acutely than other assets, as it is primarily driven by sentiment rather than fundamental factors like earnings or economic growth [5]

Core Viewpoint - The Federal Reserve's recent decision to lower interest rates has sparked dissension among its members, reflecting potential political influences and raising concerns about the Fed's independence in the face of presidential pressure [2][3][10]. Group 1: Federal Reserve Actions - The Federal Reserve has lowered its benchmark interest rate to between 3.75% and 4%, marking the second rate cut of the year [6]. - A third rate cut is not guaranteed, and the Fed's policy is not predetermined, indicating potential for further debate among members [2]. - The end of the Fed's balance sheet run-off on December 1 may signal a shift towards liquidity and quantitative easing, aligning with President Trump's economic preferences [2][6]. Group 2: Dissension Among Fed Members - Recent meetings have seen dissent from members, including Stephen Miran, who has called for a half-point rate cut, while others, like Kansas City Fed President Jeffrey Schmid, advocate for maintaining current rates [4][5]. - The last instance of multiple dissents occurred in 2019, making the current situation notable and raising questions about the political dynamics within the Fed [3][4]. Group 3: Political Influences - President Trump has publicly criticized Fed Chair Jerome Powell, labeling him "incompetent" and suggesting that future leadership will better reflect his economic vision [6][10]. - The appointment of Miran, a Trump appointee, and the nomination of Kevin Hassett as a potential successor to Powell, highlight concerns regarding the Fed's independence and the influence of political considerations on monetary policy [9][10]. Group 4: Market Implications - The ongoing dissension and potential politicization of the Fed could lead to increased market volatility and cautious behavior from consumers and investors regarding borrowing and investment decisions [7][8]. - The Center for American Progress emphasizes the importance of data-driven decisions for maintaining market stability, warning against the risks of political influence on the Fed's operations [8].

10 YEAR YIELDS JUST FLAT HERE, AROUND 4.1%. TURNING TO THE FED, KANSAS CITY PRESIDENT GIVING HIS REASON FOR THE REASON WHY HE DESCENTED. MICHAEL MCKEE IS WITH US NOW.MICHAEL: THE FED'S BLACKOUT PERIOD ENDING LAST NIGHT AND SCHMIDT DISAGREES WITH THE FED LUGS AT THE BALANCE OF RISK. HE SAID I DO NOT THINK THE POLICY RATE WILL NOT MUCH STRESS NECESSARY LABOR MARKET THAT ARISES FROM STRUCTURAL CHANGES. HOWEVER, A CUT COULD HAVE LONGER LASTING INFLATION IF THE FED'S COMMITMENT TO ITS 2.% OBJECTIVE COMES INTO QU ...

Core Viewpoint - The Federal Reserve lowered interest rates by 25 basis points on October 29, but Chairman Jerome Powell's comments suggested that further rate cuts in December are not guaranteed [1] Summary by Relevant Sections - **Interest Rate Decision** - The Federal Reserve has reduced interest rates by 25 basis points [1] - **Market Commentary** - Chairman Jerome Powell indicated uncertainty regarding additional rate cuts in December, signaling a cautious approach moving forward [1]

Group 1: Global Equity Funds - Global equity funds attracted a net inflow of $10.58 billion in the week to October 29, marking the sixth consecutive week of inflows [1] - Asian equity funds experienced the largest weekly inflow since January 2024, totaling $7.19 billion, with Japan receiving approximately $5.46 billion [3] - U.S. and European equity funds saw inflows of $1.81 billion and $137 million, respectively [3] Group 2: Federal Reserve and Economic Factors - The Federal Reserve reduced interest rates by 25 basis points, citing easing inflationary pressures, but indicated that another rate cut in December is unlikely due to insufficient data [2] - U.S. President Trump announced a tariff reduction on Chinese imports in exchange for actions from Beijing regarding the fentanyl trade and agricultural purchases [2] Group 3: Bond Funds and Money Market - Global bond funds recorded inflows for the 28th consecutive week, with a net gain of $11.84 billion [4] - Euro-denominated bond funds attracted nearly $3.14 billion, while government and high-yield bond funds saw net purchases of $2.84 billion and $1.66 billion, respectively [4] - Investments in money market funds decreased to $3.26 billion from $13.56 billion in the previous week [4] Group 4: Commodity Funds - Gold and precious metals commodity funds experienced a net outflow of $4.17 billion, marking the first net sale in 10 weeks [5] - In emerging markets, equity funds saw inflows of $2.23 billion, the highest weekly total since September 24, while bond funds faced outflows of $437 million [5]