Eurozone bond yields rebounded, analysis of short-term trends of spot gold, silver, crude oil and foreign exchange on November 13

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 rising 0.01%, the S&P 500 futures falling 0.15%, and the Nasdaq futures falling 0.20%. Germany's DAX index fell by 0.65%, Britain's FTSE 100 index fell by 0.54%, France's CAC40 index rose by 0.37%, and Europe's Stoxx 50 index fell by 0.05%.

2. Interpretation of market news

Eurozone bond yields rebounded, and the market focused on the game of economic data between the United States and the United States

⑴ German government bond yields ended three consecutive days of decline and rebounded slightly, with the 10-year yield rising 2.5 basis points to 2.66%, close to mid-January levels. The market is waiting for U.S. economic data to provide a new direction. ⑵ Expectations for the Federal Reserve to cut interest rates have significantly cooled, with the probability of a 25 basis point rate cut before the end of the year falling from 65% at the beginning of this week to 53%, reflecting the market's increasing concerns about the stickiness of inflation. ⑶ Although the Eurozone industrial output data fell short of expectations, it was mainly dragged down by the fluctuations of Irish multinational xmxyly.companies, and the performance of the core economies remained solid. ⑷The interest rate spread between Italy and Germany's 10-year government bonds narrowed to 72 basis points, the narrowest level since 2010, indicating that the market's concerns about the debt risks of southern European countries have eased. ⑸ The divergence in the economic outlook has intensified. The German Expert xmxyly.committee has lowered its growth forecast for 2026, while Capital Economics believes that the structural resistance faced by the manufacturing industry will make the mid-term outlook bleak. ⑹ The market has priced in the ECB's interest rate path of "maintaining high for a longer period", and the expected probability of an interest rate cut before September remains at around 40%, which is consistent with the situation of U.S. monetary policy.into a delicate balance.

Federal Reserve officials emphasized that balance sheet policies should be clearly xmxyly.communicated

⑴ San Francisco Fed President Mary Daly said that the Federal Reserve should clarify the goals and framework of balance sheet operations in detail to the public. ⑵ Daly pointed out that balance sheet operations have multiple policy objectives, including providing liquidity to ensure financial stability, stimulating economic development and managing interest rate levels. ⑶ Since the launch of quantitative tightening in 2022, the Federal Reserve has continued to reduce the size of its balance sheet. ⑷Federal Reserve officials have announced that they will stop the asset reduction process on December 1. ⑸ Asset purchase operations may be gradually restarted in the future.

The South African rand rose to a new high in the past two years as fiscal reforms boosted confidence

⑴ The exchange rate of the South African rand against the US dollar rose above the 17 mark, reaching the highest level since January 2023. ⑵ Optimistic expectations of the fiscal review, the weakening of the US dollar and rising gold prices jointly promote currency strength. ⑶Finance Minister Enoke Godongwana delivered an optimistic and reliable budget speech on November 12. ⑷Announced major policy adjustments: Tightening the inflation target range from 3%-6% to 3% (tolerance range ±1%). ⑸Announced a R1 trillion infrastructure investment plan over the next three years. ⑹ The new inflation target aims to strengthen price stability and assist xmxyly.companies and consumers in their long-term investment planning. ⑺The Ministry of Finance stated that the new target will gradually curb inflation and expectations, create conditions for interest rate cuts and enhance xmxyly.competitiveness.

The Central Bank of Chile remains on hold, with inflation risk becoming a key variable in future policies

⑴ The minutes of the October meeting of the Central Bank of Chile showed that the decision to maintain the benchmark interest rate at 4.75% was unanimously adopted and is regarded as the "only feasible option" at the current stage. ⑵ Policymakers expect that inflation will still face upward risks in the future and emphasize the need to collect more information to provide a basis for subsequent interest rate decisions. ⑶The central bank made it clear that it will xmxyly.comprehensively consider the latest inflation data at its next meeting in mid-December, implying that the time for policy change is not yet ripe. ⑷The current interest rate level has remained stable for multiple consecutive cycles, reflecting the central bank's cautious stance in seeking a balance between economic growth and price stability. ⑸The market needs to pay close attention to changes in the country's inflation trajectory. Any unexpected fluctuations may change the central bank's consensus expectation of keeping interest rates unchanged.

The Ukrainian President said he had a phone call with the German Prime Minister to discuss the frontline situation and defense cooperation

Ukrainian President Zelensky said on the 13th that he had a phone call with German Chancellor Mertz, and the two sides focused on discussing the current Russian-Ukrainian frontline situation and key steps to strengthen Ukraine's defense. Zelensky said that the call took place after he inspected the Ukrainian frontline xmxyly.command post that day. He gave an update on the situation on the front lines and exchanged views on measures to further support Ukraine’s defense. Zelensky thanked Mertz for his political support in opening a Ukrainian arms export office in Berlin, and said that relevant work is being actively advanced and the two sides will maintain close contact.

USDA data black hole! The global grain market has fallen into the biggest fog in a decade

⑴ The shutdown of the U.S. government has caused a vacuum in agricultural data, leading to the largest corn and soybean yield estimates in a decadeThe market has plunged into unprecedented uncertainty. ⑵ The difference between analysts’ highest and lowest forecasts for corn production is 389 million bushels, equivalent to Michigan’s annual output; the difference between analysts’ estimates for soybeans is 184 million bushels, accounting for half of Indiana’s output. ⑶The lack of data coincides with the critical period of the harvest season. The market is forced to rely on private forecasts, spot prices and even social media information to make decisions, but none of them can replace the authority of official reports. ⑷Export demand is also foggy. This data gap coincides with a sensitive period in trade negotiations. The suspension of export sales reports has caused a huge deviation in demand assessment. ⑸Analysts generally expect the final output to be lower than the September estimate. The estimated corn yield range is 181.7-186.0 bushels per acre, both lower than the Ministry of Agriculture's previous forecast of 186.7. ⑹The Ministry of Agriculture’s report to be released this Friday has become the focus of the market. Its data will verify various market rumors in the past two months and may trigger violent fluctuations in agricultural product prices.

The U.S. bond market fell into wait-and-see mode, with economic data shadowing the market

⑴ U.S. Treasury bond yields stabilized during the European trading session, with the two-year variety rising slightly by 0.8 basis points to 3.573%, and long-term yields remaining basically flat, indicating that market sentiment is becoming cautious. ⑵ Although the reopening of the U.S. government has brought short-term benefits, investor attention has turned to deeper problems that the backlog of economic data may reveal. ⑶ Some analysts pointed out that this week's weak ADP report exacerbated market uneasiness. The data showed that in the four weeks to the end of October, U.S. private employers cut an average of 11,250 jobs per week. ⑷The market is concerned that upcoming data may paint a weaker picture of the labor market and overall demand, which will directly affect the Fed's policy path. ⑸The current bond market is in a typical wait-and-see state, with investors seeking a balance between the benefits of the government's opening and economic concerns. Subsequent data disclosure will become a key catalyst to break the deadlock.

The European banking system has excess liquidity and loan demand has almost dried up

⑴ The latest data from the European Central Bank shows that the size of overnight deposits in the banking system is as high as 2.51 trillion euros, while the use of overnight loans is only 1 million euros. ⑵ The deposit and loan data form a shocking contrast. The scale of deposits is more than 2.5 million times the demand for loans, highlighting the severe excess liquidity in the banking system. ⑶ xmxyly.compared with the previous trading day, overnight loan usage plummeted from 28 million euros to 1 million euros, indicating a sharp shrinkage in short-term financing demand. ⑷ Banks’ current account positions with the central bank remain at a high level of 1.72 trillion euros, further confirming the abundance of funds in the financial system. ⑸ This extreme differentiation phenomenon reflects the continued sluggishness of bank risk appetite, and the market needs to pay attention to the impact of the obstruction of the credit transmission mechanism on the effectiveness of monetary policy.

Italy successfully issued 8 billion euros of bonds, showing strong demand, showing confidence

⑴ Italy successfully xmxyly.completed the issuance of 8 billion euros of multi-term bonds, covering 3-year, 7-year and 30-year varieties, and the overall market demand is strong. ⑵The maximum size of the 3-year bond is 3.5 billion euros, with a yield of 2.38% and a subscription ratio of 1.46 times, winning a bid of 5.105 billion euros. ⑶ Two 7-year varieties each issued 1.5 billion euros. Among them, the bond due in July 2032 has a yield of 2.95% and a subscription ratio of 1.78 times, which is the most outstanding performance. ⑷ 1.5 billion euros of 30-year ultra-long bonds were issued, with a yield set at 4.30% and a subscription ratio of 1.56 times, indicating stable demand for long-term capital allocation. ⑸The final pricing of all varieties was better than the quoted price at the time of issuance, and the spread narrowed by 0.4 to 1.1 basis points, indicating that investors’ recognition of Italy’s sovereign credit has increased.

Trump’s 24-hour operation fully revealed: the end of the shutdown and political gaming

⑴ Trump signed a bill to officially end the longest government shutdown in U.S. history. He estimated that the shutdown caused US$1.5 trillion in losses, but a full impact assessment will still take weeks or even months. ⑵ In the field of trade, Switzerland’s chief trade negotiator is going to Washington for negotiations, aiming to reach a trade agreement and reduce the current tariffs on Swiss goods. ⑶ Trump ordered the Treasury Department to stop minting 1-cent coins on the grounds that the cost was too high. He pointed out that the production cost actually exceeded 2 cents and believed that the move was too wasteful. ⑷ In a striking move on the diplomatic front, Trump sent a letter to the President of Israel, publicly urging him to exercise his power to pardon Prime Minister Netanyahu, who is facing multiple criminal charges. ⑸These actions show that its policy focus is on domestic economic efficiency and diplomatic intervention. The market needs to pay attention to the chain reactions that these decisions may trigger.

The interest rate spread between France and Germany has narrowed strangely, and market pricing deviates from fundamentals

⑴ The interest rate spread between French government bonds and German government bonds has narrowed significantly in the past four trading days, especially in varieties with maturities of 5 years and above. ⑵ After the directional adjustment of interest rate spreads, French government bonds have now entered the "expensive" range, which is particularly prominent in the two-month constant yield-to-maturity regression model. ⑶ This round of interest rate spread narrowing is extremely rapid. The 5-year variety has tightened by 4 basis points this week, while the 10-year and 30-year varieties have both narrowed significantly by 6 basis points. ⑷It should be noted that the current interest rate spread level does not appear particularly tight in the six-month regression model, indicating that recent changes may be driven by short-term factors. ⑸ There is a temporary deviation between market pricing and fundamentals. Investors need to be alert to the sustainability of this deviation and possible correction risks in the future.

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 1.1622, an increase of 0.24%. The price of (EUR/USD) surged in the last trading session in New York, breaking above the key resistance of 1.1595, supported by its trading as well as the short-term bullish correction trend, which continued to trade above the EMA50, strengthening the chances of locking in new resistance in the near term. This rise is taking place despite negative signals from the relative strength indicator, indicating that buyer power is dominant in this track.

GBP/USD: As of 21:20 Beijing time, GBP/USD rose and is now trading at 1.3181, an increase of 0.36%. Before the New York market opened, the (GBPUSD) price fell in the last intraday transaction, and it was mainly short in the short term. The bull trend continues to dominate, and its movement is along the secondary trend lines supporting this trend, while relying on the support of EMA50, which may provide an opportunity to gain new bull momentum, thus helping it attempt to rebound higher.

Spot gold: As of 21:20 Beijing time, spot gold rose and was now trading at 4233.69, an increase of 0.91%. Before the New York market opened, (gold) prices continued to rise at the level of the latest trading day, which was dominant on a short-term basis. is a bull market whose trading along the trend line reinforces the stability of this trajectory, and the dynamic pressure represented by its trading above the EMA50 persists, in addition to positive signals on the relative strength indicator, although it remains stable at overbought levels.

Spot silver: As of 21:20 Beijing time, spot silver rose, now trading at 53.719, an increase of 0.87%. Before the New York market opened, the price of silver fell on the last trading day due to the stability of the key resistance of $54.40. This resistance is where we are. The expected objective in the analysis is to collect gains from its previous rise in an attempt to unload some overbought conditions on the relative strength indicator, especially as the short-term primary bullish trend dominates and trades along secondary trendlines from where negative signals have emerged.

Crude oil market: As of 21:20 Beijing time, U.S. oil rose, now trading at 58.980, an increase of 0.85%. Before the New York market, (crude oil) prices rose on the last trading day, trying to recover some of the previous losses and unloading some oversold conditions on the relative strength indicator, especially with the emergence of positive signals, affected by the break of the previous short-term bullish correction trend line.

4. Institutional view

JPMorgan Chase: The British economic slowdown is intensifying and the Bank of England is expected to cut interest rates in December

Scott Gardner, personal investment strategist at JPMorgan Chase, pointed out that UK GDP only increased slightly by 0.1% in the third quarter, weaker than expected.Revitalize the economy. Gardner analysis said that although current consumer spending remains stable, weak employment data has become a risk point worthy of vigilance, which may spread and drag down consumption in the future. At the same time, sluggish GDP data also intensified discussions around the government budget. With tax increases almost confirmed, consumption and service sector spending is expected to face greater headwinds by the second quarter of next year, when tax increases and spending measures officially take effect.

The above content is all about "[XM Group]: Eurozone bond yields rebounded, spot gold, silver, crude oil, foreign exchange short-term trend analysis on November 13". It was carefully xmxyly.compiled and edited by the XM foreign exchange editor. I hope it will be helpful to your trading! Thanks for the support!

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