Core Viewpoint - The recent strength of the US dollar, despite two interest rate cuts by the Federal Reserve, is primarily supported by the resilience of the US economy, inflation, and employment data [1][3][30]. Economic Indicators - The Federal Reserve cut interest rates by a total of 50 basis points from September to November, yet the dollar index rose from 96.64 to 100.15, driven by unexpected inflation resilience, which remained at 3.0% in September, exceeding the 2% target [5][15]. - Non-farm payrolls in September surged to 119,000, significantly higher than the 73,000 and 22,000 in July and August, respectively, indicating a rebound in sectors like healthcare and education [6]. - The unemployment rate increased from 4.0% to 4.4%, reflecting a complex labor market [7]. Federal Reserve Dynamics - Internal disagreements within the Federal Reserve regarding future rate cuts have created uncertainty in the market, with a 71% probability of a 25 basis point cut in December and a 29% chance of maintaining the current rate [11][30]. - The 10-year US Treasury yield remains at 4.06%, with real yields exceeding 1.8%, maintaining attractiveness for investors [11]. Market Liquidity - The US government shutdown has restricted liquidity, while the Federal Reserve continues to reduce its balance sheet, leading to a tightening of liquidity conditions that further supports the dollar [15][30]. Economic Growth - The US GDP growth rate for Q3 is projected to reach 4.2%, with private investment growth revised upward from 1.3% to 4.9%, indicating a strong economic foundation for the dollar [15][30]. Global Economic Context - The strength of the dollar is also influenced by the poor performance of other major currencies, such as the euro, yen, and pound, which are struggling with their own economic challenges [17][19][21][23]. - The eurozone's GDP growth is forecasted at 1.4%, but persistent inflation pressures hinder its recovery, while Japan faces a "high inflation, weak growth" cycle [19][21]. - The UK is experiencing high inflation at 3.6% and rising unemployment, making further appreciation of the pound against the dollar unlikely [23]. Trade Balance - The US trade deficit is narrowing, with a reported deficit of $328.1 billion from April to August 2025, a decrease of 11.7% year-over-year, primarily due to a decline in goods imports [26][28]. - The average monthly imports have decreased by 18.3% compared to the first three months of the year, while the US economy continues to grow, which is a crucial factor supporting the dollar [28]. Conclusion - The current high volatility of the dollar is a result of the resilience of the US economy, global economic divergence, and policy disagreements, suggesting that the market should remain patient regarding expectations of a weaker dollar [30][33].

Group 1: Global Economic Outlook - The global market is experiencing a complex interplay of "stagnation" and "momentum," influenced by escalating tariff disputes and policy coordination challenges that suppress economic growth [1][3] - Expectations for a shift to accommodative monetary policies in major economies, resilient corporate earnings, and a structural bull market in commodities are providing localized upward momentum [1][3] Group 2: U.S. Market Insights - The previously strong U.S. labor market is showing signs of weakness, prompting a shift in investor sentiment and signaling the Federal Reserve's potential for interest rate cuts [4] - The Fed's anticipated rate cuts are a central theme for the quarter, with concerns about the sustainability of the tech-driven market rally [4] Group 3: Precious Metals Market - Gold prices surged to a historical high of $3,700, driven by the Fed's rate cuts, geopolitical tensions, and structural changes in the market [5] - The outlook for precious metals is bolstered by lower borrowing costs and increasing demand for safe-haven assets amid concerns over central bank independence [5] Group 4: Energy Market Dynamics - Despite heightened geopolitical tensions, the oil market appears well-supplied in the short term, with significant increases in production noted [6] - The International Energy Agency (IEA) emphasizes the importance of collaboration with producers and consumers to ensure global energy system resilience [6] Group 5: European Market Trends - Europe is at a strategic turning point, with inflation easing and global monetary policies shifting towards further accommodation, leading to a positive outlook for European equities [8] - The Stoxx 600, German DAX, and UK FTSE are expected to maintain growth momentum, supported by fiscal stimulus and stable monetary policies [8] Group 6: Currency Market Analysis - The Australian dollar against the U.S. dollar is expected to experience range-bound fluctuations, influenced by significant news risks such as CPI data and central bank communications [8] - The U.S. dollar index has lost critical support levels, indicating a potential downward trend, while the British pound may be nearing the end of its upward channel against the dollar [9]

Core Insights - The global market is facing unprecedented uncertainty as the fourth quarter of 2025 approaches, influenced by the Federal Reserve's easing monetary policy, slowing global economic growth, and Trump's aggressive tariff policies [1][4]. Global Economic Outlook - The ATFX analysis team predicts a "divergent intensification" in the global economy, with some economies showing recovery momentum while others remain stagnant, driven by significant divergences in central bank monetary policies, new tariff impacts, and escalating cross-border trade and technology frictions [4]. US Market Analysis - The previously strong US labor market is showing signs of weakness, prompting a shift in investor sentiment and increasing expectations for interest rate cuts by the Federal Reserve, which is a key theme for the quarter [5]. - The performance of technology giants is raising questions about the sustainability of record-high indices, indicating a potential shift in market dynamics [5]. Gold Market Insights - Spot gold prices reached a historical high of $3,700, driven by the Fed's interest rate cuts, geopolitical tensions, and structural demand increases, enhancing the appeal of non-yielding precious metals [6]. Oil Market Dynamics - Despite heightened geopolitical tensions, the oil market appears well-supplied in the short term, with an average daily increase of 1 million barrels since February, although ongoing geopolitical developments pose risks to global energy security [7]. European Market Outlook - Europe is at a strategic turning point with slowing inflation and a shift towards looser global monetary policies, leading to a generally positive outlook for European stocks, particularly benefiting from fiscal stimulus and stable monetary policies [9]. - The ATFX analysis team emphasizes the potential of undervalued European stocks, which offer attractive long-term growth opportunities despite global risks [9]. Currency Analysis - In addition to core asset classes, the analysis includes in-depth evaluations of major currency pairs, focusing on the impacts of monetary policy divergence, political risk premiums, and key technical levels on exchange rate movements [9].