Core Viewpoint - DBS Bank's report indicates a "high possibility" of the Federal Reserve (Fed) cutting interest rates again in December, despite recent balanced communication from the Fed [1] Group 1: Interest Rate Decisions - The Fed is expected to face political pressure and initial employment market signals that may lead to another rate cut in December [1] - Following the rate cut in October, Fed officials have adopted a cautious stance, with hawkish views suggesting that substantial deterioration in the labor market and significant easing of inflation are necessary for further loosening [1][2] - DBS analysts believe the threshold for further easing is relatively low due to political realities and corporate layoffs [1] Group 2: Quantitative Tightening (QT) and Monetary Policy - The Fed has announced it will stop its quantitative tightening (QT) program on December 1, which has been in place for three years [1] - There is broad consensus among Fed officials regarding the end of QT, driven by the need for more bank reserves to maintain stability in the financial system [2] - DBS expects the Fed to continue reducing its holdings of mortgage-backed securities (MBS) while reinvesting the proceeds into U.S. Treasury securities [2] - If rising repo rates do not decline in the coming months, the Fed may begin asset purchases to prevent further declines in reserves, indicating a potential return to quantitative easing (QE) [2]

Report Industry Investment Rating No relevant content provided. Core Viewpoints - The prices of gold and silver showed a trend of rising first and then falling this month, and are currently in a consolidation phase, but there is still strong support below. The Fed's hawkish stance on monetary policy has put significant pressure on the market's expectations of the Fed's interest rate cuts, causing the previous strong performance of gold and silver prices to slow down. However, Powell's statement on the balance sheet is a key turning point, and the expansion of the Fed's balance sheet in the future provides a solid reason, which has a more significant driving effect on precious metal prices. It is recommended to go long on silver on dips, with the reference operating range of the main contract of Shanghai gold being 880 - 966 yuan/gram, and that of the main contract of Shanghai silver being 11,001 - 12,366 yuan/kilogram [11]. Summary by Directory 1. Monthly Assessment and Market Outlook - **Market Performance**: From October 9 to November 6, 2025, the main contract of COMEX gold fell 1.9% to $3,984.8 per ounce, reaching a record high of $4,398 per ounce during the session. The main contract of Shanghai gold rose slightly by 0.86% to 917.8 yuan/gram, reaching a record high of 1,001.96 yuan/gram during the session. The main contract of COMEX silver fell slightly by 1.25% to $47.845 per ounce, reaching a record high of $53.765 per ounce during the session. The main contract of Shanghai silver rose 2.03% to 11,427 yuan/kilogram, reaching a record high of 12,366 yuan/kilogram during the session [11][29]. - **Fed's Monetary Policy**: In the October FOMC meeting, Powell carried out a "hawkish rate cut", lowering the policy rate by 25bps to 3.75% - 4.00%, while expressing a hawkish stance on the subsequent interest rate path. The Fed's hawkish statements have put significant pressure on the market's expectations of interest rate cuts. However, Powell's statement on ending the balance sheet reduction on December 1st provides a solid reason for the subsequent expansion of the Fed's balance sheet, which is a strong driving force for the rise of gold and silver prices [11]. - **Precious Metals Sector**: The structural tightness of overseas silver spot cannot be completely resolved. China's photovoltaic silver demand is resilient, and India's silver imports are expected to rebound in the fourth quarter. The gold - silver ratio as of November 7 was 82.3, significantly higher than the historical average of 62 since 1971. It is recommended to go long on silver on dips [11]. - **Technical Analysis**: The Shanghai gold index has turned out of the downward trend and is currently consolidating in the range of 900 - 930 yuan/gram. It is expected to maintain a volatile pattern, and it is advisable to buy on dips at the lower edge of the range. The technical chart of Shanghai silver is significantly stronger than that of Shanghai gold, forming a relatively strong ascending triangle consolidation pattern after turning out of the downward trend. In the short term, it will still maintain a volatile trend [15][16]. 2. Market Review - **Price and Position Changes**: COMEX gold and silver prices showed a trend of rising first and then falling this month. The total position of Shanghai gold decreased by 21.3% to 336,200 lots, and the total position of Shanghai silver decreased by 12.15% to 688,800 lots. As of the latest report period on September 23, the net long position of COMEX gold managed funds increased by 1,578 lots to 160,500 lots, and the net long position of COMEX silver managed funds increased by 1,293 lots to 37,000 lots. Due to the US government shutdown, some data such as COMEX gold and silver CFTC total positions and managed funds' net positions have not been updated [29][32][35][37]. - **ETF Holdings**: As of November 5, the total holdings of gold ETFs within the Reuters statistical scope were 2,309.6 tons, and the total holdings of overseas silver ETFs were 27,892.1 tons [40]. 3. Interest Rates and Liquidity - **Interest Rate Indicators**: The report presents multiple interest rate - related charts, including the spread between 10 - year and 2 - year US Treasury bonds, short - term US Treasury yields, the federal funds rate, overnight reverse repurchase rate, 10 - year nominal interest rate, real interest rate, and inflation expectations [49][52]. - **Fed's Balance Sheet**: The Fed's balance sheet shows changes in various items. Due to the US government shutdown, the balance of the US Treasury's TGA account has risen significantly to $94.27 billion, and the deposit reserve balance has decreased to $2.85 trillion [54][57]. 4. Macroeconomic Data - **Inflation Data**: In September, the year - on - year value of US CPI was 3%, lower than the expected 3.1% and the previous value of 2.9%. The month - on - month value was 0.3%, lower than the expected and previous value of 0.4%. The year - on - year value of core CPI was 3%, lower than the expected and previous value of 3.1%, and the month - on - month value was 0.2%, lower than the previous value of 0.3% [62]. - **Employment Data**: Due to the US government shutdown, the latest weekly unemployment data in the US is missing [65]. - **PMI and PPI Data**: In October, the US ISM manufacturing PMI was 48.7, lower than the expected 49.5 and the previous value of 49.1; the ISM non - manufacturing PMI was 52.4, higher than the expected 50.8 and the previous value of 50 [68]. - **Housing Data**: In August, the annualized value of new home sales in the US was 800,000 units, significantly higher than the previous value of 664,000 units. The annualized value of building permits was 1.33 million units, and the annualized value of new housing starts was 1.307 million units [71]. 5. Precious Metals Spreads - **Gold Basis**: The report presents the charts of gold TD - SHFE basis, showing the changes in the basis over time [74][75]. - **Silver Basis**: The report presents the charts of silver TD - SHFE basis, showing the changes in the basis over time [77][78]. - **Domestic - Foreign Spreads**: The report presents the charts of domestic - foreign spreads of gold and silver, showing the changes in the spreads over time [81][83]. 6. Precious Metals Inventories - **Silver Inventories**: The report presents the inventory charts of silver in multiple markets, including the total inventory of Shanghai Gold Exchange, Shanghai Futures Exchange, and COMEX, as well as the inventories of individual exchanges [88][90]. - **Gold Inventories**: The report presents the inventory charts of COMEX gold and LBMA gold [92].

Group 1: US Treasury and Labor Market - The US Treasury's financing strategy is expected to become more flexible and proactive, considering market structure factors, which may not lead to a significant rise in yields from refinancing announcements [1] - The US labor market showed weakness with over 150,000 layoffs in October, the largest since 2003, leading to market overreactions regarding labor market signals [2] - Analysts suggest that if expectations for significant Fed rate cuts persist, the 10-year US Treasury yield could drop to 3.8%-3.9% in the next three to six months [2] Group 2: UK and Eurozone Monetary Policy - Nomura Securities has adjusted its forecast for the Bank of England's rate cuts, now expecting the current cycle to end in April next year, with a potential cut in December [2] - Societe Generale's analysts believe that for German 10-year bond yields to exceed 3%, the European Central Bank would need to raise rates further and accumulate term premiums [3] Group 3: Economic Forecasts - Barclays raised its GDP growth forecast for South Korea in 2026 from 1.7% to 2.1%, attributing this to a recovery in the semiconductor industry and increased foreign investment [3] - The current account surplus forecast for South Korea was also increased from $8.4 billion to $11 billion for 2026 [3]

Core Viewpoint - Ray Dalio, founder of Bridgewater Associates, warns that the Federal Reserve's end to quantitative tightening (QT) is not a technical adjustment but a dangerous experiment that adds liquidity to an already inflated bubble [2][3] Group 1: Current Economic Environment - The current policy mix of expanding fiscal deficits, restarting monetary easing, and the AI narrative is pushing the U.S. towards a perilous end of a large debt cycle characterized by a liquidity-driven super bubble [2] - Historically, quantitative easing (QE) has been introduced during recession periods when asset valuations were low, inflation was subdued, and credit was frozen, providing significant policy space [3] - In contrast, the current environment features a S&P 500 earnings yield of only 4.4%, nearly inverted with the nominal yield of 10-year U.S. Treasuries at 4%, and a compressed equity risk premium of just 0.3% [3] Group 2: Risks of Current Policies - The economy is maintaining a 2% real growth rate, with an unemployment rate of 4.3% and inflation still above 3%, indicating overheating rather than recession [3] - The government continues to accumulate debt aggressively, and if the Fed resumes bond purchases, it effectively monetizes the fiscal deficit, creating a closed loop of debt monetization [3] - A significant expansion of the balance sheet alongside a simultaneous reduction in interest rates could lead the market to perceive this as fiscal dominance, where the central bank is forced to cover government overspending, potentially unanchoring inflation expectations [3] Group 3: Asset Impact and Market Dynamics - Liquidity will not be evenly distributed; QE tends to lower real interest rates and compress risk premiums, directly boosting assets that are most sensitive to discount rates, such as technology, AI, cryptocurrencies, and gold [3] - Dalio anticipates a short-term liquidity frenzy reminiscent of the 1999 internet bubble, with price-to-earnings multiples continuing to expand, benefiting both long-duration growth stocks and inflation-hedging assets [3] - Experts from CAMarkets note that behind this frenzy, issues such as wealth disparity, financial fragility, and inflationary pressures are likely to intensify, and when policies eventually shift, the cost of the bubble's collapse will exceed that of any historical cycle [3]

Core Viewpoint - The Federal Reserve may soon need to purchase bonds to expand its balance sheet after halting the reduction of its bond holdings, as indicated by John Williams, the President of the New York Fed [1][2]. Group 1: Federal Reserve's Actions - The Federal Reserve has officially announced the end of quantitative tightening (QT) on December 1, but liquidity in the U.S. market remains tight, with key interest rates rising significantly [1]. - The secured overnight financing rate (SOFR) recently surged to 4.22%, exceeding the upper limit of the Fed's target policy rate range of 4% [1]. - The use of the Standing Repo Facility (SRF) reached a historical high of $50.35 billion last Friday, indicating increased reliance on emergency tools [2]. Group 2: Liquidity Crisis Factors - The liquidity crisis is primarily linked to the U.S. Treasury, which has been unable to release liquidity due to government shutdown impacts, leading to a Treasury General Account (TGA) balance swelling to approximately $1 trillion [2]. - Bank reserves have decreased to $2.85 trillion, and the balance of overnight reverse repurchase agreements (ON-RRP) is nearly exhausted, significantly weakening the liquidity buffer [2]. Group 3: Future Outlook - Williams emphasized that determining when the Fed will need to inject cash into the system is complex and requires close monitoring of various market indicators [2]. - He clarified that purchasing bonds to maintain adequate liquidity does not equate to a change in monetary policy stance, but rather represents a natural next step in implementing a strategy for sufficient reserves [2].

Core Insights - The financing pressure in the U.S. money market is raising concerns on Wall Street, with major investment banks warning that ongoing funding stress may force the Federal Reserve to take more rapid actions, potentially even restarting its dormant asset purchase program [1][18] Group 1: Current Market Conditions - Key market interest rates have reached their highest level since 2020, with the spread between tri-party repo rates and the Fed's set rates peaking last Friday [1] - Although tri-party repo rates have slightly eased this week, market participants believe this is only a temporary relief [1][2] - Analysts indicate that the combination of three years of quantitative tightening and record U.S. Treasury issuance is pushing bank reserves into a dangerous territory [1][3] Group 2: Factors Contributing to Financing Pressure - Barclays identifies two main factors behind the recent funding pressure: a massive issuance of short-term Treasury bills and a growing financing demand from leveraged investors [3] - The Treasury General Account (TGA) balance surged to $1 trillion by October 30, significantly exceeding the Treasury's quarterly target of $850 billion, draining liquidity from the banking system [3][5] - The end of the month saw a drop in reserve balances to nearly $2.8 trillion, exacerbated by the withdrawal of funds from the U.S. repo market by the Bank of Canada [3] Group 3: Short-term Positive Factors - Barclays notes two potential short-term positive factors that may alleviate funding pressure before year-end: a decrease in TGA and a reduction in Treasury issuance [4][5] - The TGA balance is expected to decline to $850 billion by year-end, allowing approximately $150 billion in reserves to flow back into the banking system [5] - The peak of short-term Treasury issuance has passed, with minimal net issuance expected in December, which could inject significant liquidity into the market [8] Group 4: Ongoing Risks - Despite short-term relief, Barclays emphasizes that structural pressures will continue to pose threats to the funding market in Q4 [9] - Traditionally, Q4 sees increased funding pressure as Global Systemically Important Banks (GSIBs) actively shrink their balance sheets to manage systemic risk scores [10] - The effectiveness of the Fed's Standing Repo Facility (SRF) is being challenged, as tri-party general collateral repo rates have recently exceeded SRF rates, indicating a reluctance among traders to borrow from the Fed [11][14] Group 5: Potential Fed Actions - Analysts suggest that if funding pressures persist, the Fed may need to resume direct asset purchases [18][19] - The Dallas Fed President has indicated that if recent repo rate increases are not temporary, the Fed should begin purchasing assets [18] - Barclays believes that while the Fed is closely monitoring repo pressures, immediate intervention is unlikely due to the presence of "hawkish" members on the committee [18][19]

Core Viewpoint - The issuance of $4 billion sovereign bonds by the Chinese Ministry of Finance in Hong Kong has attracted a staggering subscription amount of $118.2 billion, resulting in a subscription multiple of 30 times, indicating strong international investor confidence in Chinese sovereign credit [1][6]. Group 1: Market Reactions and Implications - The 3-year and 5-year bond rates were set at 3.646% and 3.787% respectively, which has caused significant ripples in the global capital markets [3]. - The U.S. federal debt has surpassed $38 trillion, with a debt-to-GDP ratio soaring to 126.8%, significantly exceeding the IMF's safety threshold of 100% for developed economies [3]. - The Federal Reserve's recent decision to halt its balance sheet reduction and cut interest rates by 25 basis points reflects concerns over potential liquidity crises in the financial markets [3][5]. Group 2: Investor Composition and Trends - The bond issuance saw 53% of investors from Asia, 25% from Europe, 16% from the Middle East, and 6% from the U.S., with sovereign investors making up 42% of the total [6]. - The structure of investors indicates a strong recognition of Chinese sovereign credit among international mainstream capital [8]. Group 3: Strategic Financial Moves - The issuance of sovereign dollar bonds serves as a critical pricing benchmark for Chinese enterprises seeking cross-border financing, potentially lowering their financing costs and uncertainties [8]. - The issuance is part of a broader strategy to utilize international financial market rules to showcase China's creditworthiness, especially if the yields on Chinese bonds are lower than U.S. Treasuries [10]. Group 4: Global Financial Dynamics - The global reserve currency landscape is shifting, with the U.S. dollar's share declining from 73% in 2000 to below 59%, while the renminbi's reserve share has increased to 2.3% [10]. - China's approach to issuing dollar-denominated bonds is not aimed at undermining the existing dollar system but rather at providing alternative options, gradually reshaping the international financial landscape [15]. Group 5: Future Outlook - Analysts predict that by 2035, U.S. interest payments on debt could consume 7% of GDP, which is more than double the entire U.S. military budget, indicating a potential shift in global capital flows [15]. - The ongoing financial power transition may redefine the global monetary order, with implications for the future economic landscape [15].

Group 1 - The core viewpoint of the article highlights the positive performance of the US non-manufacturing PMI in October, which stood at 52.4, exceeding expectations and previous values, leading to a collective rise in major US stock indices [1] - The US stock market saw the Nasdaq increase by 0.65%, the Dow Jones by 0.48%, and the S&P 500 by 0.37%, indicating a favorable market response to the PMI data [1] - Domestic futures markets showed mixed results, with certain commodities like coking coal and various agricultural products experiencing gains, while others like propylene and asphalt saw declines [1] Group 2 - The article discusses the performance of major stock indices, noting a recovery after a previous decline, with the electric equipment sector leading gains and the computer sector lagging [2] - The financing balance decreased by 3.32 billion yuan to 24.73687 trillion yuan, indicating a potential shift in market liquidity [2] - The article emphasizes the long-term focus on technology self-reliance as part of the 14th Five-Year Plan, suggesting that the technology sector will be a key investment direction [2] Group 3 - The article reports on the shipping market, specifically the European container shipping index, which rose by 3.82% to surpass 1900 points, reflecting positive macroeconomic sentiment [3] - The average price for large containers in early November stabilized around 2200 USD, with expectations for price adjustments based on seasonal demand [3] - The article notes that the glass and soda ash markets are in a phase of inventory digestion, with cautious market sentiment prevailing [3][19] Group 4 - The article highlights the significant growth in China's new energy storage capacity, which has exceeded 100 million kilowatts, representing a more than 30-fold increase compared to the end of the 13th Five-Year Plan [8] - The article mentions that this capacity now accounts for over 40% of the global total, positioning China as a leader in this sector [8]

Core Viewpoint - The tightening of the money market is expected to persist until November, with increasing pressure on the Federal Reserve to support liquidity before halting balance sheet reduction next month [2][3]. Group 1: Market Conditions - The Secured Overnight Financing Rate (SOFR) surged by 18 basis points last Friday, marking the largest single-day increase since the Fed's rate hike cycle began in March 2020 [2]. - Despite a slight retreat on Monday, SOFR remains above key policy benchmarks like the federal funds rate, indicating ongoing liquidity issues in the market [2]. - Other short-term rates in the overnight repurchase market continue to trade above the Fed's managed rates, reflecting persistent funding pressures [2]. Group 2: Federal Reserve Actions - The Federal Reserve announced it will stop reducing its holdings of Treasury securities in December, ending a three-year quantitative tightening effort due to increasing liquidity constraints [3]. - There are internal disagreements within the Fed regarding the timing of asset purchases, with some officials advocating for a minimal balance sheet while others suggest increasing reserves to keep pace with the banking system and economic growth [3][4]. - Recent data shows bank reserves have fallen to $2.8 trillion, the lowest level since September 2020, raising concerns about market distortions [3]. Group 3: Interest Rate Dynamics - Dallas Fed President Logan indicated that if repo rates remain high, the Fed will need to purchase assets, expressing disappointment over the three-party repo rates exceeding the Fed's standing repo facility rate [4]. - The SOFR was 32 basis points higher than the reserve balance rate last Friday, the largest spread since 2020, although it fell to 4.13% on Monday, still above the current reserve balance rate of 3.9% [4]. - The pressure in the tri-party market may be more severe than indicated by published rates, prompting calls for the Fed to take more aggressive actions, including purchasing Treasury securities [4][5]. Group 4: Historical Context and Future Implications - The current situation may reflect greater fragility in overnight financing rates compared to 2019, with large hedge funds holding approximately $1 trillion more in Treasury long positions than six years ago [5]. - The use of repo financing has nearly doubled since then, suggesting that similar actions to those taken in 2019, where the Fed injected $500 billion into the market, may be necessary to alleviate pressure during Treasury settlement periods or critical payment dates [5].

Core Viewpoint - The tightening conditions in the money market may persist until November, pressuring the Federal Reserve to act before halting balance sheet reduction next month [1] Group 1: Market Conditions - The overnight secured financing rate (SOFR) surged by 18 basis points last Friday, marking the largest single-day fluctuation since the Fed's rate hike cycle began in March 2020 [1] - Despite a decrease in SOFR on Monday, it remains above the Fed's key policy benchmark rates, including the federal funds rate [1][6] - Other short-term rates in the interbank repo market continue to trade above the Fed's managed rates [1] Group 2: Federal Reserve Actions - The Federal Reserve announced it will stop reducing its holdings of U.S. Treasury securities by December, ending a three-year quantitative tightening effort due to increasing financing pressures [1][5] - Fed Chair Jerome Powell indicated that at some point, the Fed will gradually increase reserve levels, but did not specify a timeline [5] - Dallas Fed President Lorie Logan stated that if repo rates remain high, the Fed will need to purchase assets, expressing disappointment over the three-party repo rates exceeding the Fed's standing repo facility rate [5] Group 3: Financial Market Dynamics - The spread between SOFR and the interest on reserve balances (IORB) reached 32 basis points last Friday, the largest since 2020, before falling to 4.13% on Monday [6] - The effective federal funds rate was lowered by 25 basis points to a range of 3.75%-4% on October 29 [6] - Joseph Abate from SMBC Nikko Securities suggested that market pressures may be more significant than reported rates indicate, advocating for more aggressive Fed actions, including purchasing Treasury bills [9]