Core Viewpoint - The British pound is expected to achieve its best weekly performance in over three months following the budget announcement by Chancellor Rachel Reeves, despite a slight decline against the US dollar on Thursday [1]. Group 1: Budget Announcement and Market Reaction - Chancellor Reeves' budget plan, which aims to fund additional welfare spending through the highest tax burden since World War II, includes a tax increase of £26 billion (approximately $34 billion) [1]. - The pound has risen approximately 0.85% this week, indicating a potential for the largest weekly gain since early August [1]. - George Vessey, Chief FX and Macro Strategist at Convera, noted that the pound's rise post-budget is more of a relief rebound rather than the start of a sustained trend, with market reactions being muted as most fiscal plans were already priced in [1]. Group 2: Economic Outlook and Analyst Opinions - Analysts have mixed views on the budget; Deutsche Bank's Sanjay Raja described it as "better than expected," suggesting that the doubling of fiscal buffers could lower inflation and create conditions for the Bank of England to cut rates [4]. - The Institute for Fiscal Studies believes that while increasing taxes to enhance fiscal buffers is wise, the budget fails to address structural issues, as tax increases are future-oriented while spending is immediate [4]. - Concerns were raised by Ian Begg from the London School of Economics regarding the extension of freeze periods as a form of "implicit tax increase," which expands the taxpayer base without changing rates, thereby squeezing disposable income [4]. - Andrew Wishart from Berenberg Bank indicated that the tightening of budget deficits over the next two years supports the Bank of England's potential rate cuts, but warned that the budget heavily relies on the assumption of expected inflation decline, with external factors like energy prices posing new upward pressures [4].

Group 1: Federal Reserve and Economic Predictions - Morgan Stanley predicts the Federal Reserve will initiate rate cuts in December, reversing their previous forecast of a delay until January [1] - The research team led by Michael Feroli noted support for recent rate cuts from several Federal Reserve officials, particularly from New York Fed President Williams [1] - Morgan Stanley now expects two rate cuts of 25 basis points each in December and January [1] Group 2: UK Economic Outlook - Berenberg Bank indicates that the UK's fiscal space has increased, which supports the possibility of rate cuts by the Bank of England [2] - Deutsche Bank reports that the UK budget is better than expected, with fiscal buffers increasing from £10 billion to just below £22 billion, and public borrowing expected to decline [3] - BlackRock analysts believe the UK budget will boost market confidence and alleviate political concerns, with the government expanding fiscal space to £22 billion [2] Group 3: Currency and Market Reactions - Morgan Stanley has ended its bullish stance on the British pound, suggesting that the recent budget may have provided the last positive catalyst for the currency [3] - Analysts noted that the correlation between the pound and the stock market has dropped to zero, diminishing the currency's appeal [3] Group 4: Japan's Economic Policy - Fitch Ratings warns that Japan's new stimulus plan could pose risks to its credit rating if it leads to prolonged monetary easing and increased government debt [4] - The stimulus plan, amounting to approximately 3.4% of GDP, has uncertain fiscal impacts due to its reliance on non-fiscal measures and potential implementation risks [4] - Analysts from the Commonwealth Bank of Australia suggest that political factors may delay the Bank of Japan's interest rate hike until January [4] Group 5: Industry Insights - China Galaxy Securities forecasts a "bumpy" trend for the computer industry in 2025, with a focus on AI applications and the acceleration of model parity by 2026 [5] - CITIC Securities anticipates downward pressure on beef supply by 2026, with a cumulative reduction in stock exceeding 10% since 2024 [6] - CITIC Securities has raised its lithium price forecast upper limit to 120,000 yuan per ton, driven by strong demand in the energy storage battery sector [6]

Group 1 - The U.S. stock market faced pressure due to concerns over high valuations of tech stocks and a sudden drop in expectations for interest rate cuts by the Federal Reserve, leading to declines in major indices: Dow Jones down 1.91%, S&P 500 down 1.95%, and Nasdaq down 2.74% [1] - International oil prices fell as geopolitical tensions eased, with predictions from major investment banks indicating a continued oversupply of global crude oil into next year; U.S. oil and Brent crude prices dropped by 3.38% and 2.84% respectively [1] - International gold prices experienced a slight decline of 0.36% due to the U.S. dollar index remaining high, increasing the holding costs of gold, coupled with uncertainty regarding the Federal Reserve's interest rate outlook for December [1] Group 2 - Key economic data from the U.S. is set to be released this week ahead of the Federal Reserve's December meeting, including the Producer Price Index (PPI) for October and the core Personal Consumption Expenditures (PCE) price index, which is favored by the Fed [1] - The U.K. is expected to announce its autumn budget this week, with anticipated tax increases as inflation rates have decreased to 3.6%, raising expectations for a potential interest rate cut by the Bank of England in December [1] - The European Central Bank (ECB) is expected to maintain its benchmark interest rate unchanged, with a focus on the release of the minutes from the October monetary policy meeting, as most ECB officials have expressed satisfaction with the current monetary policy [1] - The Reserve Bank of New Zealand and the Bank of Korea will announce their latest interest rate decisions this week, with the former having previously cut rates by 50 basis points in October to stimulate the economy and potential further cuts anticipated [1]

Core Viewpoint - Goldman Sachs Asset Management's 2026 investment outlook report indicates a divergence in central bank policies across major markets, influenced by varying economic conditions [1] Group 1: U.S. Market - The labor market is showing signs of weakness, leading Goldman Sachs to predict that the Federal Reserve may cut interest rates twice in 2026 [1] Group 2: European Market - The European Central Bank is expected to maintain interest rates at their current levels for the foreseeable future [1] - The Bank of England may resume rate cuts in December, contingent on improvements in inflation, a relatively weak labor market, and potential tax increases [1] Group 3: Japanese Market - High inflation and strong growth in Japan may prompt the Bank of Japan to raise interest rates [1] - Recent political changes and a shift towards expansionary fiscal policy further reinforce the likelihood of this direction [1]

Economic Overview - The UK economy contracted in September due to concerns over tax increases and a cyberattack on Jaguar Land Rover, increasing pressure on the Labour government ahead of the critical budget announcement on November 26 [1] - The UK's GDP fell by 0.1% month-on-month in September, against an expectation of 0%, and grew by 1.1% year-on-year, below the expected 1.3% [1] - The third quarter GDP growth was 0.1% quarter-on-quarter, below the expected 0.2%, and 1.3% year-on-year, also below the expected 1.4% [1] Sector Performance - In September, UK industrial output decreased by 2%, the largest decline since January 2021, with manufacturing output down by 1.7%, marking the biggest drop since April 2024 [1] - Seven out of thirteen manufacturing sub-sectors reported monthly declines, with the production of motor vehicles, trailers, and semi-trailers plummeting by 28.6% [1] - The electricity, gas, steam, and air conditioning supply sector also saw a decline of 3.4%, alongside a 3.4% drop in mining and quarrying [1] Business Investment - Business investment in the third quarter fell by 0.3%, better than the expected 0.7% decline, but marking the second consecutive quarter of decline, indicating ongoing weak corporate spending [1] - Year-on-year, business investment grew by only 0.7%, a significant slowdown from the previous quarter's 3% growth [1] Monetary Policy Outlook - Recent economic signals have increased the likelihood of a rate cut by the Bank of England in December, with market expectations for a rate cut now at approximately 82% [1] - Disappointing GDP data may pave the way for the Bank of England to support further easing of monetary policy, creating conditions for a potential rate cut in December [2] - The anticipated fiscal tightening in the upcoming budget could range from 0.5% to 1% of GDP, which may further encourage market expectations for a rate cut, negatively impacting the British pound [3]

Group 1 - The core viewpoint of the articles indicates that the GBP/USD exchange rate is influenced by the strengthening of the US dollar due to the potential resolution of the US government shutdown and concerns regarding the UK central bank's future interest rate decisions [1][2][4] Group 2 - The US dollar has strengthened as a result of bipartisan support for a budget agreement that would restore operations for some federal agencies and pay federal employees, alleviating market concerns about economic and financial uncertainty [1] - The Federal Reserve is expected to lower interest rates by 25 basis points in December, with a probability close to 66%, driven by rising layoff numbers in US companies, which has led to increased investor expectations for a rate cut [1] - The Bank of England has maintained its interest rate at 4.0%, with future rate cuts dependent on inflation trends, and market expectations suggest a potential rate cut before Christmas [2] - The technical analysis shows that the GBP/USD is currently around 1.3150, with short-term support at 1.3120 and resistance at 1.3200, indicating a weak short-term trend but potential for rebound based on US economic data and Bank of England signals [2]

Report Summary 1. Report Industry Investment Rating - Not provided in the report. 2. Core Viewpoints - The weak employment performance in the US supports the prices of precious metals. The high number of corporate lay - offs in the US in October has increased the probability of a Fed rate cut in December. Along with factors such as the Fed providing liquidity, geopolitical risks, and central banks' gold - buying, precious metal prices may be supported [1]. 3. Summary by Related Catalogs Precious Metal Market Data - **Gold**: - Shanghai Gold futures' closing price was 917.80 yuan/g, with a change of 5.54 yuan compared to the previous day and - 4.12 yuan compared to the previous week. The trading volume was 238,433.00, a decrease of 157,531.00 from the previous day. The inventory remained at 87,816.00 (in ten - gram units) [1]. - COMEX gold futures' closing price was 3941.70 dollars/ounce, with a change of 43.10 dollars compared to the previous day and - 5.60 dollars compared to the previous week. The trading volume was 281,102.00, a decrease of 97,457.00 from the previous week [1]. - London gold spot price was 3968.20 dollars/ounce, with a change of - 20.20 dollars compared to the previous week [1]. - **Silver**: - Shanghai Silver futures' closing price was 11427.00 yuan/ten - gram, with a change of 151.00 yuan compared to the previous day and - 14.00 yuan compared to the previous week. The trading volume was 571,201.00, a decrease of 306,143.00 from the previous week [1]. - COMEX silver futures' closing price was 47.85 dollars/ounce, with a change of - 0.02 dollars compared to the previous day and 0.57 dollars compared to the previous week. The trading volume was 74,607.00, a decrease of 24,464.00 from the previous week [1]. - London silver spot price was 47.61 dollars/ounce, with a change of 0.51 dollars compared to the previous week [1]. Important Information - The direction of the Fed's December rate cut is unclear. This year's voting members are hesitant due to the government shutdown, and next year's members are more concerned about inflation. The Bank of England kept the interest rate at 4%, and the expectation of a December rate cut is rising [1]. - The AI revolution has accelerated the lay - off wave. In October, the number of Challenger corporate lay - offs in the US increased by 175.3% year - on - year, reaching the highest level in the same period in twenty years. The private data provider Revelio Labs reported a decrease of 9100 in non - farm employment in October [1]. Investment Strategy - Temporarily stay on the sidelines. For London gold, pay attention to the support level around 3580 - 3860 and the resistance level around 4180 - 4384; for Shanghai gold, focus on the support level around 830 - 860 and the resistance level around 950 - 1000. For London silver, pay attention to the support level around 39 - 42 and the resistance level around 50 - 55; for Shanghai silver, focus on the support level around 9400 - 10000 and the resistance level around 11600 - 12400 [1].

Group 1 - Goldman Sachs now expects the Bank of England to cut interest rates by 25 basis points in November, a shift from its previous forecast in September [1] - The bank anticipates a quarterly rate cut schedule, reducing the benchmark rate from the current 4% to 3% by July 2026, earlier than the previously expected November 2026 [1] - The revision is attributed to persistent inflation and a weakening labor market, with September CPI rising 3.8% year-on-year, below market expectations [1] Group 2 - The unemployment rate in the UK rose to 4.8% in August, the highest level since May 2021, contrary to expectations of stability [1] - Private sector wage growth slowed to 4.4%, marking the lowest level since the end of 2021, despite remaining above the Bank of England's target of around 3% [1] - Bank of England Governor Bailey expressed concerns over the economy operating below potential and the ongoing weakness in the labor market [2]

Core Viewpoint - The UK government bond yields have collectively risen following the Bank of England's decision to maintain the base interest rate at 4%, amid concerns over rising public debt and budget deficits [1][3]. Group 1: Interest Rate Decisions - The Bank of England's Monetary Policy Committee voted to keep the interest rate unchanged, with seven members in favor and two advocating for a 25 basis point cut [1]. - Investment institutions have adjusted their forecasts for potential interest rate cuts by the Bank of England, with some suggesting a delay until February next year [3][4]. Group 2: Public Debt and Budget Deficits - As of the end of August, the UK's net public sector debt reached 96.4% of GDP, with a budget deficit of £18 billion (approximately $24.29 billion) in August, marking the highest borrowing for that month in five years [3]. - The cumulative deficit for the first five months of the fiscal year reached £83.8 billion (approximately $113.08 billion), exceeding previous forecasts by £11.4 billion (approximately $15.38 billion) [3]. Group 3: Market Reactions - Following the announcement of the unchanged interest rate, UK government bond yields increased, with the 1-year yield rising by 0.3 basis points to 3.925%, the 10-year yield up by 2.8 basis points to 4.713%, and the 30-year yield increasing by 5.6 basis points to 5.556% [1][2].

Group 1: Federal Reserve Insights - UBS forecasts that the Federal Reserve may lower interest rates by 75 basis points by Q1 2026, prioritizing labor market weakness over temporary inflation increases [1] - Bank of America indicates that Waller, a potential successor to Powell, seems satisfied with a 25 basis point rate cut, but internal debates on further easing remain intense due to rising inflation pressures and a deteriorating labor market [2] - ING reports that the Fed's recent decision to cut rates by 25 basis points is overall bearish for the dollar, with expectations of two more cuts this year [3] Group 2: UK Central Bank Expectations - TD Securities anticipates the Bank of England will cut rates by 25 basis points in November, maintaining a cautious stance on monetary policy [4] - Danske Bank notes that the Bank of England's recent decisions lack hawkish signals, with expectations for a rate cut in November and a gradual approach to easing [6] - Deutsche Bank highlights internal divisions within the Bank of England regarding monetary policy, predicting a rate cut in December [8] Group 3: Industry and Company Developments - CITIC Securities recommends focusing on opportunities in the photovoltaic industry, citing new energy consumption standards that could improve profitability [7] - Huatai Securities suggests that gold prices may face short-term pressure following the Fed's rate cut, but long-term investment value remains intact due to ongoing economic concerns [8] - CITIC Securities highlights Huawei's Ascend product line, which aims to accelerate breakthroughs in domestic computing power [9] - CITIC Securities expects a turning point in the performance growth of Hong Kong stocks in the second half of the year, with positive outlooks for sectors like technology and healthcare [10]