Core Insights - The U.S. government shutdown has entered its sixth week, leading to the inability of the Labor Department to release critical non-farm payroll reports for the second consecutive month, creating unprecedented challenges for the Federal Reserve's interest rate decisions in December [1][3][5] - Economists express concerns that key economic data, particularly the unemployment rate for October, may never be published due to the shutdown, resulting in a significant information void for policymakers [1][2][5] Group 1: Economic Data Impact - The shutdown has resulted in a complete halt of government data, making it difficult for policymakers, investors, economists, and the general public to understand the economic situation clearly [3] - The Labor Department's data collection methods differ between business surveys and household surveys, complicating the collection of reliable unemployment data [2][4] - There is a growing risk that the Labor Department may abandon the collection of October data altogether, focusing instead on November data, which would mean the October unemployment rate may never be reported [2][4][5] Group 2: Federal Reserve's Dilemma - The lack of reliable data is exacerbating existing divisions within the Federal Reserve regarding monetary policy, with officials expressing differing views on the need for interest rate cuts [1][8] - Market expectations indicate a slightly higher than 50% chance of a rate cut in December, but the absence of key data complicates the decision-making process for the Fed [1][8] - The Fed's upcoming meeting in December may lack reliable employment data, contrasting with the situation in October, which could lead to further policy disagreements among officials [9] Group 3: Alternative Data Sources - In the absence of official data, the market is turning to private sector data, such as ADP's employment figures, which indicate weak job growth concentrated in specific sectors like education and healthcare [6][7] - However, private data cannot fully substitute for official statistics, particularly regarding inflation, leading to concerns about the quality and reliability of the available information [6][7] - The quality of government data is under scrutiny, with some officials fearing that this could lead to more aggressive rate cuts from those worried about labor market conditions, while others may advocate for a pause due to inflation concerns [7][8]

Core Viewpoint - The international gold market is experiencing a bullish trend, with prices fluctuating around $4001 per ounce, indicating a potential upward movement after eight days of consolidation [1][3]. Group 1: Economic Indicators - The U.S. job market shows signs of weakness, with a surprising decrease of 9,100 non-farm jobs in October, reversing the previous increase of 33,000 [2]. - Challenger companies reported a record high in layoffs, exceeding 153,000, marking a 175.3% year-on-year increase, the highest for this period since 2003 [2]. - Market expectations for a Federal Reserve rate cut in December have surpassed 70%, reflecting growing concerns over economic conditions [2]. Group 2: Federal Reserve Policy - There is a notable division among policymakers regarding the future of interest rates, with some expressing caution due to a lack of key inflation data caused by government shutdowns [2]. - The Chicago Fed President highlighted the uncertainty in economic visibility, while the Cleveland Fed President argued for tighter monetary policy due to persistent inflation [2]. Group 3: Gold Market Analysis - International gold is trading within a range of $3950 to $4020, with a delicate balance at the $4000 mark, which has resisted upward movements three times [3]. - The current macroeconomic environment, characterized by mixed signals from U.S. economic data, is reinforcing the volatile nature of gold prices, with the market awaiting the Federal Reserve's decision to break the current stalemate [3]. Group 4: Technical Analysis - Key resistance levels for gold are identified between $4000 and $4015, with a defensive position suggested above $4020 [4]. - A target range for potential downward movement is set between $3970 and $3930, with a focus on monitoring market dynamics during Asian and European trading sessions [4].

Core Viewpoint - The future direction of the Japanese yen will largely depend on the policy divergence between the Federal Reserve and the Bank of Japan, rather than domestic political factors [1] Group 1 - If the resignation of Shinto Abe leads to increased instability within the Liberal Democratic Party, the market may price in a higher political risk premium [1] - This could result in a surge of safe-haven inflows into the yen, which would help to mitigate pressure on Japanese government bond yields [1]

Core Viewpoint - Federal Reserve Chairman Jerome Powell's speech at the Jackson Hole conference is interpreted as a clear signal for a potential interest rate cut in September, but it also highlights increasing internal divisions within the Fed regarding future monetary policy [1][2]. Group 1: Market Reactions - Financial markets reacted positively to Powell's speech, with U.S. stocks rising sharply and the Dow Jones reaching a historic high, while U.S. Treasury yields fell significantly, particularly a 7.44 basis point drop in the 2-year yield [1]. - Wall Street strategists quickly adjusted their expectations, with Deutsche Bank's chief U.S. economist Matthew Luzzetti indicating that Powell's remarks strongly suggest a 25 basis point cut in September [1][3]. Group 2: Internal Divisions within the Fed - Despite the consensus on a September rate cut, there are significant internal disagreements among Fed officials, divided into three main camps: the dovish camp advocating for multiple cuts, the hawkish camp opposing cuts due to inflation concerns, and the centrist camp favoring a cautious approach [4][5]. - The dovish camp includes officials like Fed governors Waller and Bowman, who express concerns over labor market weakness, while the hawkish camp, represented by figures like Cleveland Fed President Beth Hammack, remains skeptical about the need for cuts [4]. Group 3: Future Policy Uncertainty - Powell's acknowledgment of increasing risks in the labor market and potential inflation from tariffs complicates the Fed's future policy path, making it difficult to predict subsequent actions after a potential rate cut [5][6]. - The possibility of a "one-and-done" scenario, where only a single rate cut occurs, is highlighted as a realistic outcome depending on upcoming employment and inflation data [5][6]. Group 4: Data-Driven Decision Making - Powell's speech has shifted market focus from whether there will be a September cut to how many cuts may follow, emphasizing the importance of upcoming economic data in shaping future Fed decisions [6]. - The next FOMC meeting will be crucial as it will provide new economic forecasts, which will be more significant than the single rate cut decision itself [6].

Group 1: Currency Market Overview - The US dollar index has declined for the second consecutive day, trading around 98.59, with expectations for the largest weekly gain in over a month due to safe-haven demand from Middle East conflicts [1] - The Federal Reserve has raised its interest rate targets for 2026 and 2027 to 3.6% and 3.4% respectively, indicating significant inflation risks [1] - Investor sentiment shows a strong preference for strategic dollar short positions, with the total dollar short positions nearing $40 billion, close to historical records [1] Group 2: Euro and Yen Dynamics - The euro has rebounded above the key level of 1.15 against the dollar, although its upward movement may be limited due to potential US intervention in the Middle East [5] - Japanese inflation data has exceeded expectations, supporting further rate hike expectations, which has benefited the yen [6] - The Japanese government plans to significantly reduce long-term bond issuance, with a reduction of 1.8 trillion yen in 20-year bonds, indicating a tightening fiscal policy [6] Group 3: Other Currency Movements - The Swiss franc is expected to record its largest weekly decline since mid-April due to the Swiss National Bank's rate cut to 0% [7] - The Norwegian central bank unexpectedly cut rates by 25 basis points, leading to a decline of over 1% in the Norwegian krone against the dollar [8] - Risk-sensitive currencies like the Australian and New Zealand dollars have seen a slight increase of 0.1% this week [9]

Core Viewpoint - The Bank of England's monetary policy committee member, Mr. Green, suggests that there may be potential policy divergences in the future [1] Group 1 - Mr. Green indicates that the current economic environment may lead to differing opinions among policymakers [1] - The possibility of policy divergence could impact market expectations and economic forecasts [1]

Core Viewpoint - President Trump is frustrated with the ongoing conflict in Gaza and hopes Israeli Prime Minister Netanyahu will end it [1] Group 1: U.S. and Israel Relations - U.S. and Israeli officials deny that Trump is preparing to "abandon" Israel or exerting significant pressure on Netanyahu [1] - There is an increasing policy divergence between Trump, who wants to end the conflict, and Netanyahu, who is expanding it [1] Group 2: Trump's Concerns - Trump expresses a desire for the conflict to end, for hostages to return home, for aid to enter Gaza, and for the rebuilding of Gaza to begin [1]