Core Viewpoint - The European Central Bank (ECB) must keep all options open regarding the inflation outlook, facing both upward and downward risks, according to Olli Rehn, a member of the ECB Governing Council and Governor of the Bank of Finland [1] Group 1 - Rehn confirmed his intention to run for the position of ECB Vice President next year, succeeding Luis de Guindos, whose term ends in May 2026 [1] - He emphasized the importance of maintaining sufficient flexibility in decision-making, stating that the ECB will not commit to any specific interest rate path [1] - Despite some alleviation of uncertainty, Rehn noted that it remains high [1]

Core Viewpoint - The European Central Bank (ECB) must remain vigilant against inflationary risks and resist the temptation to make minor adjustments to its policies [1] Group 1: Inflation Risks - Peter Kazimir, a member of the ECB Governing Council, highlighted the need to be cautious about upward inflation risks due to uncertainties in supply chains, energy costs, and unexpectedly strong potential price pressures [1] - Kazimir emphasized that these factors indicate a persistent risk that officials must acknowledge, warning against complacency at this stage [1] Group 2: Policy Stance - Despite the inflation concerns, Kazimir reaffirmed the ECB's position that its policies are well-positioned to address the challenges posed by the current turbulent environment [1] - He advised the central bank to avoid being overly aggressive, even if short-term forecasts suggest that price pressures may not meet the ECB's targets [1]

Group 1 - The core viewpoint is that Federal Reserve Governor Waller advocates for a potential interest rate cut in December due to concerns about the labor market and expected inflation decline [1][2] - Waller emphasizes that the current inflation rate, based on the PCE index, is approximately 2.5%, indicating it is not significantly above the target of 2% and is expected to continue decreasing [3] - Waller's stance contrasts with other officials who express concerns about persistent inflation risks, highlighting a division within the Federal Reserve regarding monetary policy direction [1][2] Group 2 - Waller has been an early proponent of interest rate cuts compared to many of his colleagues, indicating a proactive approach to addressing employment risks [3] - He has previously opposed the decision to maintain interest rates in July, showcasing his consistent advocacy for a more accommodative monetary policy [3] - Waller's potential candidacy for the Federal Reserve Chair position after Powell's term ends adds a layer of political context to his statements and positions [3]

Core Viewpoint - The Federal Reserve's path for interest rate cuts is becoming increasingly uncertain, with internal divisions among officials regarding the timing and necessity of further rate reductions [2][4]. Group 1: Federal Reserve's Interest Rate Decisions - Federal Reserve Governor Christopher Waller advocates for a continued rate cut in December due to risks of a slowing labor market, contrasting with other officials who express concerns about inflation risks [3][4]. - The probability of a 25 basis point rate cut in December has decreased from over 90% to approximately 63% according to the CME FedWatch Tool [2]. - The Federal Reserve recently lowered the federal funds rate target range by 25 basis points to between 3.75% and 4.00%, marking the second consecutive rate cut [4]. Group 2: Internal Divisions Among Officials - There is a notable increase in internal dissent within the Federal Reserve, with two voting members opposing the recent rate cut, indicating a split in views on monetary policy [5]. - Kansas City Fed President Esther George expressed concerns that the recent rate cut may have been too aggressive, citing ongoing inflation risks [3][5]. - Market analysts suggest that if future economic data remains mixed, the divisions within the Federal Reserve may persist for a longer period [5][6]. Group 3: Market Reactions and Implications - Bill Gross, co-founder of Pimco, has adopted a bearish stance on U.S. Treasuries, citing excessive expansion risks in the U.S. financial system and a growing deficit [6]. - Investors are advised to adjust their strategies towards longer-term bonds, which are less affected by short-term policy fluctuations [6].

Core Viewpoint - Federal Reserve Board member Waller advocates for a rate cut in December, citing concerns over the labor market and expected inflation decline [2][4]. Group 1: Federal Reserve's Rate Decisions - Waller emphasizes the need for a rate cut in December due to potential continued slowdown in job growth, stating that all data supports this action [2]. - The Federal Reserve recently lowered the benchmark interest rate by 25 basis points for the second consecutive month to address the evident labor market slowdown [2]. - Fed Chair Powell cautioned that another rate cut in December is not guaranteed, indicating uncertainty in future monetary policy [3]. Group 2: Inflation and Tariff Concerns - Waller downplays the inflation risks associated with Trump's tariffs, suggesting that excluding temporary tariff impacts, inflation measured by the PCE index is around 2.5% and expected to decline further [4]. - He believes that tariffs will only cause a one-time price spike and that the Fed should prioritize employment risks over inflation concerns [4]. Group 3: Waller's Position and Future Prospects - Waller, nominated by Trump in 2020, is one of the candidates being considered for the Fed Chair position after Powell's term ends in May next year [4]. - He has been an early advocate for rate cuts compared to many of his colleagues and previously opposed the decision to maintain rates in July [4].

Core Viewpoint - The Federal Reserve should continue to lower interest rates in December due to ongoing risks in the labor market, as stated by Federal Reserve Governor Christopher Waller [1][2] Group 1: Interest Rate Decisions - Waller emphasized that the current primary concern is the labor market, and he advocates for a rate cut in December based on data indicating the need for such action [1] - The Federal Reserve recently lowered the benchmark interest rate by 0.25 percentage points for the second consecutive month to address a significant slowdown in the labor market during the summer [1] - Waller's comments come amid opposition from other Federal Reserve officials regarding the recent rate cut, citing persistent inflation risks [1] Group 2: Inflation and Economic Indicators - Waller downplayed the inflation risks associated with President Trump's tariff policies, suggesting that if temporary tariff impacts are excluded, the inflation rate measured by the Personal Consumption Expenditures (PCE) index is approximately 2.5% [1] - He noted that while the inflation rate is not at the target of 2%, it is not significantly above it, and a decline is expected [1] Group 3: Federal Reserve Leadership - Waller has been an early advocate for rate cuts compared to most of his colleagues, arguing that tariffs only cause one-time price increases and that employment risks should take precedence [2] - He expressed willingness to accept the role of Federal Reserve Chair if asked by the President, indicating his potential candidacy for the position [2] - U.S. Treasury Secretary Mnuchin mentioned that he is conducting a "second round" of interviews for candidates to succeed Powell, with Waller being one of the candidates [2]

Core Views - The Federal Reserve's decision to lower the benchmark interest rate by 25 basis points has led to internal divisions among its members, with some advocating for maintaining the current rate and others pushing for a more aggressive reduction [2][3][4]. Summary by Sections Interest Rate Decision - The Federal Reserve voted 10-2 to lower the benchmark interest rate to a range of 3.75%-4.00%, marking the first instance of "dual dissent" since 2019 [2]. - Kansas City Fed President Jeff Schmid argued for maintaining the current rate, citing a balanced labor market and potential long-term negative impacts on inflation if the Fed's commitment to the 2% target is questioned [2]. Internal Divisions - Several regional Fed presidents expressed skepticism about the need for further rate cuts, emphasizing the ongoing inflation risks and the need for clear evidence of economic downturns before making such decisions [3][4]. - Dallas Fed President Lorie Logan stated that unless there is clear evidence of faster-than-expected inflation decline or a cooling labor market, the likelihood of another rate cut in December is low [3]. Market Expectations - Market expectations for a rate cut in December have dropped significantly from over 95% to around 60%, reflecting uncertainty due to government shutdowns and missing economic data [6]. - Economists from Deutsche Bank, Montreal Bank, and Goldman Sachs still believe a rate cut will occur in December, while others argue that the current economic indicators do not support such a move [6][7]. Future Considerations - The upcoming public speeches from Fed officials will be crucial in setting the tone for the December meeting, as their views may influence the market's assessment of future rate cuts [5]. - Analysts suggest that the threshold for further rate cuts may be higher than previously anticipated, requiring more substantial evidence to justify such actions [7].

Market Overview - Gold experienced a significant drop but rebounded sharply, reaching a new high of $130 before adjusting below $4000 [1] - After a strong rally, gold surpassed the $4040 mark [4] - The market saw a rapid decline, dropping to $3990 for adjustment [5] - A quick flash drop occurred, indicating continued adjustments, particularly with resistance at $4030 [6] - The market continued to decline below $3990, with support seen at $3915 [7] - A rebound occurred at $3990, indicating potential for further upward movement [8] - The market is expected to face resistance at $4030 and $4075, with adjustments looking towards $4100 and $3900 [10] Influencing Factors - The Federal Reserve's decision to lower interest rates and end balance sheet reduction is expected to increase liquidity, benefiting gold [11] - The U.S.-China summit resulted in positive signals, including the suspension of a 10% tariff for one year, easing global trade tensions [11] - The upcoming U.S. PCE data is crucial as it reflects inflation levels and may influence future Fed rate decisions [12] - Discrepancies within the Federal Reserve regarding interest rate cuts may impact both the dollar and gold prices [13] Economic Context - Central banks in Japan and Europe are maintaining their current policies, while the Fed is cautious amid inflation risks [14] - Global central banks are beginning to slow down their easing measures, leading to heightened market volatility [15] - The market is entering a phase of high volatility, with rising prices contributing to increased instability [16] - Speculation about the potential for a bull market in 2025 raises questions about the sustainability of current trends [17]

Group 1: International Gold Market - International gold is currently trading around $3,981.64, with a latest price of $3,959.61 per ounce, reflecting a 0.79% increase, and has seen a high of $3,981.64 and a low of $3,914.92 during the session [1] - The short-term outlook for international gold appears to be oscillating, indicating a potential for volatility in the near term [1] Group 2: Federal Reserve Policy - The Federal Reserve announced the end of the System Open Market Account (SOMA) portfolio reduction on December 1, aligning with market expectations, while the decision-making environment remains complex due to unique funding pressures [2] - Historical trends suggest that markets often rise following the initiation of a rate-cutting cycle, but there are concerns that easing policies could reignite inflation risks, which previously prompted aggressive rate hikes [2] - There are significant internal disagreements within the Federal Reserve regarding the future policy path, with some members advocating for a pause to assess employment risks, while others support a 50 basis point cut [3] Group 3: Economic Indicators and Challenges - The current decision-making process faces challenges due to government shutdowns leading to a lack of key economic data, forcing the Federal Reserve to rely on alternative indicators to assess the labor market [3] - The third-quarter GDP performance exceeded expectations, potentially reducing the immediate need for stimulus, yet the dual risks of rising inflation and declining employment create uncertainty in future policy directions [3] - The interplay of data scarcity and internal disagreements within the Federal Reserve suggests that market volatility may increase in the short term as stakeholders await clearer policy signals [3] Group 4: Gold Market Analysis - Gold prices continue to experience downward pressure, remaining below the five-day moving average, with a critical support level at $3,900 [4] - The overall trend for gold remains weak, and if prices remain pressured between $3,980 and $4,000, further short positions may be considered, while monitoring the $3,900 support level for potential stabilization [4]

Core Viewpoint - The global risk assets experienced a halt in their upward momentum, with major stock indices in Asia and Europe declining, attributed to profit-taking after significant gains that led to historical highs [1][3][4]. Market Performance - Asian stock markets saw collective declines, with the Shanghai Composite Index down 0.22%, Shenzhen Component down 0.44%, and the Hang Seng Index down 0.33% [3][4]. - European indices also opened lower, with the DAX30 down 0.21% and CAC40 down 0.1% as of 17:00 Beijing time [4]. - Cryptocurrency markets faced declines, with Bitcoin down 0.6% and Ethereum nearly 1%, resulting in over 110,000 liquidations in the past 24 hours [4]. Precious Metals Market - Gold and silver prices experienced significant drops, with gold falling over 2% at one point, trading below $3900 per ounce, and silver down 1.97% to $45.89 per ounce [1][4]. - Analysts from Heraeus indicated that the adjustment in precious metal prices could last for several months, although they expect a potential continuation of the upward trend if investor interest remains strong [5][6]. Demand and Future Outlook - Despite recent price declines, global retail demand for gold remains robust, and gold ETF holdings have not shown significant declines, indicating sustained investor interest [6]. - Analysts predict that ongoing economic uncertainty will continue to support gold prices, with Metals Focus forecasting an average gold price of $4560 per ounce next year, reflecting a 33% increase from the current average [6][7]. - Morgan Stanley's commodity strategist anticipates that gold prices could exceed $5000 per ounce by the end of 2026, driven by persistent demand from investors and central banks [7].