Euro zone yields are stagnant at high levels, analysis of short-term trends of spot gold, silver, crude oil and foreign exchange on November 11

Global market overview

1. European and American market conditions

The three major U.S. stock index futures rose or fell mixedly, with the Dow futures falling 0.07%, the S&P 500 futures rising 0.19%, and the Nasdaq futures rising 0.41%. Germany's DAX index fell by 0.02%, Britain's FTSE 100 index rose by 0.82%, France's CAC40 index rose by 0.57%, and Europe's Stoxx 50 index rose by 0.36%.

2. Interpretation of market news

European zone yields are stagnant at high levels, and the market is waiting for signs of a breakdown

⑴European zone government bond yields hovered near one-month highs on Tuesday, with Germany's 10-year yields unchanged at 2.67%. On Monday, they hit 2.699%, the highest level since early October. ⑵ Market optimism has driven capital flows from safe assets such as bonds to stocks, but this momentum weakened significantly on Tuesday as market trading was thin due to U.S. holidays. ⑶ Many European Central Bank officials gave speeches on Tuesday. Director Frank Elderson was the first to point out that the inflation risks in the euro area are balanced and the current interest rate level is at an appropriate position. ⑷The market generally expects that the European Central Bank will keep interest rates unchanged at the next few interest rate meetings, which has made the euro zone market less sensitive to domestic data in the near future. ⑸ Investor confidence in Germany unexpectedly fell in November, and weak employment data in the UK suppressed gilt bond yields. These factors indirectly limited the room for growth in euro zone yields. ⑹ The mid-term focus will be on the delayed economic data that will be released by the U.S. government after the shutdown ends. These intensive data may provide important directional guidance. ⑺Analysts pointed out that even if the U.S. employment data deteriorates further, continuedInflation concerns will still limit the downside of U.S. interest rates, while euro zone interest rates still need more positive surprises in economic data to move significantly higher.

British employment data triggered expectations of interest rate cuts, and pound bonds rose in response

⑴The latest employment data in the UK were weaker than expected. The unemployment rate in the three months to September rose to 5.0%, exceeding market expectations of 4.9%. ⑵ Weak data prompted the market to significantly increase expectations for an interest rate cut by the Bank of England in December, with the probability rising sharply from 57% on Monday to 74%. ⑶ Analysts at Royal Bank of Canada Capital Markets pointed out that the data provides further evidence of the persistence of disinflation, which is what the Bank of England Governor is focused on before the December decision. ⑷ The rising expectations of interest rate cuts directly suppress the pound exchange rate, and push the price of British government bonds higher and the yields downward. ⑸The market has become significantly more sensitive to the shift in monetary policy from major global central banks, and any signal of economic weakness may trigger a new round of dovish pricing. ⑹ Investors need to focus on UK inflation and economic growth data in the future, which will ultimately determine whether the central bank will start an easing cycle at the end of the year.

The U.S. Senate voted to pass the temporary appropriation bill, and SoftBank cleared Nvidia!

⑴ Before the U.S. stock market opened on Tuesday, the trends of the three major U.S. stock index futures were divergent. The Nasdaq futures fell 0.36%, the S&P 500 futures fell 0.17%, and the Dow futures rose 0.03%. Most major European stock indexes rose. The British FTSE 100 index and the French CAC index both rose 0.73%. The German DAX index was flat and the European Stoxx 50 index rose 0.48%. ⑵In terms of core news, the U.S. Senate procedurally voted to pass a temporary appropriation bill, taking a key step to end the 40-day government shutdown. The bill will be transferred to the House of Representatives for review; SoftBank liquidated its NVIDIA shares in full for US$5.83 billion and promised to increase investment in OpenAI. NVIDIA CEO Jensen Huang emphasized that the demand for AI is real and is essentially different from the Internet bubble. ⑶ In addition, Buffett donated US$1.3 billion in stock and announced that he would no longer write annual shareholder letters. "The Big Short" Burry questioned technology giants' exaggerated profits. UBS predicted that the S&P 500 index would target 7,500 points next year. Apple may delay the release of a new generation of iPhone Air due to lower than expected sales. Tesla plans to expand its Texas factory to produce 10 million humanoid robots annually, and both Meta and Intel have experienced the resignation of core executives.

Terrorist attacks in South Asia have returned, and geopolitical risks have suddenly increased

⑴ A fatal car bombing occurred in New Delhi, India on Monday, killing at least eight people and injuring 20 others. The police have launched an investigation in accordance with the provisions of anti-terrorism laws. ⑵ Indian Prime Minister Modi vowed to track down the person behind the incident and emphasized that all those responsible will be brought to justice. If it is confirmed as a terrorist attack, it will be the most serious incident in New Delhi since 2011. ⑶ Islamabad, Pakistan, suffered a suicide bomb attack outside a court on Tuesday, killing at least 12 people and injuring dozens more. The security situation in South Asia has deteriorated sharply. ⑷Historical experience shows that if India accuses neighboring Pakistan of participating in the attack, geopolitical tensions may escalate rapidly.⑸ The market needs to pay close attention to the development of the situation. The rising geopolitical risks may impact the allocation preference of international capital for the South Asian market and increase the demand for safe-haven assets.

Hungary’s deficit soared, and spending money before the election may trigger a debt crisis

⑴The Hungarian government raised its fiscal deficit target to 5% for both this year and next. The surge in pre-election spending xmxyly.completely disrupted the fiscal consolidation plan. ⑵ Faced with three consecutive years of economic stagnation, the government launched measures such as large-scale household tax cuts, wage increases, and pension food stamps to win the support of voters. ⑶In September, the Minister of Economy predicted that the deficit would be 4%-4.5% this year and 4% next year. All have been raised to 5% to make room for additional spending. ⑷The government will freeze 192 billion forints in reserves and double the bank tax to 360 billion forints in 2026 to make up for part of the shortfall. ⑸ The forint fell 0.7% against the euro, off yesterday's one-and-a-half-year high; OTP Bank's stock price fell 3%, significantly weaker than the market. ⑹The pension top-up plan will be implemented in phases starting next year, with an additional expenditure of 150 billion forints, increasing the total gap to 5.445 trillion forints in 2026. ⑺International rating agencies have successively warned that Fitch noted last month that deficit reduction was slower than expected, and S&P said that the surge in deficit may threaten credit ratings. ⑻The government plans to fill the gap through foreign currency borrowing early next year. Moody's will review Hungary's rating at the end of the month, and fiscal sustainability faces a severe test.

The UK firmly refuses the EU’s sky-high membership fees, and defense cooperation is in a deadlock

⑴The British government officially rejected the European xmxyly.commission’s request and did not agree to pay a membership fee of up to 6.75 billion euros to join the EU’s flagship defense fund. ⑵The European xmxyly.commission proposes that the UK pays 4 billion to 6.5 billion euros to participate in the "European Security Action Plan" and pay an additional 150 million to 250 million euros in administrative costs. ⑶The British government statement emphasized that it would only agree to transactions that bring actual value to the UK and its industry, and no agreement has yet been reached. ⑷This negotiation involves the qualifications of British xmxyly.companies to participate in a defense plan totaling 150 billion euros. Successful access will bring major business opportunities to domestic xmxyly.companies. ⑸ This defense plan allows member states to borrow money to invest in defense capabilities, and the scope of expenditure covers equipment whose main xmxyly.components xmxyly.come from the EU, Ukraine and the European Economic Area. ⑹The UK’s position shows that it will adhere to an independent defense policy after Brexit and refuses to pay an excessive premium for symbolic cooperation. ⑺The deadlock in negotiations highlights the fundamental differences between the EU and the UK in subsequent cooperation, and value assessment has become the focus of the game between the two parties. ⑻The final result will directly affect the depth of British defense xmxyly.companies’ participation in the European market, as well as the integrity and funding scale of the EU defense system.

The U.S. aviation industry is in a deep shutdown crisis, with a wave of flight cancellations sweeping the United States

⑴ Although the government shutdown is expected to end, U.S. air passengers still face nationwide flight cancellations and delays, making it difficult to resume normal operations this week. ⑵ The U.S. Federal Aviation Administration requires 40 major airports to reduce daily flights. The reduction will be 6% on Tuesday, 10% on Friday, and may rise to 20% as the shutdown continues. ⑶If the government shutdown ends, the flight reduction order will not be taken immediatelyAccording to reports, the Minister of Transport emphasized the need to first evaluate air traffic control staffing and safety data. ⑷ This round of the longest shutdown in U.S. history has forced 13,000 air traffic controllers and 50,000 Transportation Security Administration agents to take unpaid leave. ⑸ More than 1.2 million passengers were affected by flight delays and cancellations last weekend. On Sunday alone, 2,950 flights were canceled and 11,200 flights were delayed. ⑹ Staff absenteeism rates are as high as 20%-40%. American Airlines stated that 250,000 passengers suffered schedule interruptions over the weekend due to a shortage of controllers. ⑺Even if the shutdown ends, it will take 24 hours for controllers to be repaid, and it will still take several days for personnel to return to work and the system to be restored. ⑻ Industry leaders confirmed that transportation will return to normal during Thanksgiving and Christmas, but warned that operating conditions will continue to be severe this week.

Countdown to U.S.-Switzerland tariff negotiations, 15% new tax rate sparks market expectations

⑴ The U.S.-Switzerland tariff agreement will be reached as early as Thursday or Friday, and U.S. import tariffs on Swiss goods are expected to be reduced from the current 39% to 15%. ⑵ Sources revealed that if the agreement is not finalized this week, the agreement may be reached early next week, but it still needs to wait for Trump’s final approval. ⑶The content of the agreement shows that the U.S. tariff rate on Swiss goods will be set at 15%, a significant drop of 24 percentage points from the current rate. ⑷ This tariff adjustment involves special arrangements under the framework of Trump’s tariff remarks. The specific implementation details will be clarified after the agreement is officially announced. ⑸ Market expectations for the US-Switzerland tariff agreement continue to rise. If successfully reached, it will significantly improve the xmxyly.competitive environment for Swiss export xmxyly.companies. ⑹ The reduction in the tariff rate from 39% to 15% exceeded market consensus, indicating that the United States may show greater flexibility in trade policy. ⑺ There are still variables before the agreement is finalized. Trump's approval has become a key link, and the market needs to pay close attention to subsequent official statements. ⑻The results of this negotiation will provide an important reference for other countries seeking to reach similar agreements with the United States, which may trigger a chain reaction.

3. Trends of major currency pairs before the New York market opens

EUR/USD: As of 21:20 Beijing time, EUR/USD rose and is now at 1.1586, an increase of 0.26%. Taking advantage of positive signals emerging from the relative strength indicator in New York, (EUR/USD) prices rose on the last trading day, indicating improved support for the price movement while the pair continues to attempt to strengthen its recovery after previously limited losses.

GBP/USD: As of 21:20 Beijing time, GBP/USD fell and is now at 1.3156, a decrease of 0.14%. Pre-market in New York, (GBPUSD) price fell in the last trading session in an attempt to gain some strong momentum that may help it maintain stability in the bull market correction wave on a short-term basis. Its continuous trading above the EMA50 strengthens its chances of recovery on a near-term basis, especially after unloading overbought conditions, with the positive signal on the relative strength indicator.emerge, opening the way to greater gains.

Spot gold: As of 21:20 Beijing time, spot gold has risen and is currently trading at 4141.93, an increase of 0.64%. Pre-market in New York, (gold) price stabilized in its last intraday session, preparing to attack the key resistance at $4,155, which represented a potential target in our previous analysis, supported by its continued trading above the EMA50 and dominated by a small bull run and trading along the trendline on a short-term basis. On the other hand, we noticed a negative signal on the relative strength indicator after reaching overbought levels, which reduced the last gains as it was needed to unload these overbought conditions.

Spot silver: As of 21:20 Beijing time, spot silver has risen, now trading at 51.087, an increase of 1.22%. Pre-market in New York, (silver) prices continued to rise on the last trading day, although after reaching overbought levels, negative signals emerged on the relative strength indicator in an attempt to move away from this overbought condition. This shows the strength and volume of the bullish momentum, especially with the continuation of positive pressure generated by trading above the EMA50, and the dominance of the small bull market wave on a short-term basis and its trading along the trend line, reinforcing this trajectory.

Crude oil market: As of 21:20 Beijing time, U.S. oil rose, now trading at 60.650, an increase of 0.88%. Before the New York session, the price of (crude oil) rose in the last intraday trade, supported by the emergence of positive signals from the Relative Strength Index, trying to surpass all negative pressures at once, and is trying to break its EMA50 resistance and attack the main bearish trend line in the short term, while taking advantage of its stability above $59.85.

4. Institutional perspective

Citi: The outlook for the Indonesian stock market appears to be more optimistic

Citi Investment Research analysts reported that looking forward to 2026, the outlook for the Indonesian stock market appears to be more optimistic. They noted that structural challenges such as foreign direct investment bottlenecks and exchange rate stability remain. However, the xmxyly.combination of higher liquidity, larger fiscal multipliers and resilient domestic demand should provide a supportive environment for Indonesian equities. Higher liquidity and lower funding costs are likely to support banking sector earnings recovery through stronger loan growth, margin expansion and normalization of credit costs. These analysts said that fiscal spending increasedThe addition of social subsidy programs should also boost household consumption, benefiting consumer and retail stocks including Mayor Indah. Citi has set a 2026 target for the Jakarta xmxyly.composite Index of 9,250 points.

Morgan Stanley: The Fed may still have enough data to cut interest rates despite delays

Morgan Stanley (165.052.691.66%) analysts said that U.S. non-farm payrolls data for September will likely be released about three working days after the government shutdown ends, and most other key monthly indicators may not be released for another one to two weeks.

Bradley Tian and other analysts wrote in the report that due to disruptions in data collection, October data will take longer to be released and may not be released in time for the December Federal Open Market xmxyly.committee (FOMC) meeting.

However, economists at the bank believe that the Fed will have enough data to justify another interest rate cut.

The above content is all about "[XM Foreign Exchange Official Website]: Euro zone yields are stalemate at high levels, analysis of short-term trend of spot gold, silver, crude oil and foreign exchange on November 11". It is carefully xmxyly.compiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading! Thanks for the support!

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