Last week, the market was full of uncertainty, with the release of US economic data and the approaching US election making market sentiment highly nervous. Gold is sought after as a safe-haven asset and is likely to break through its historical highs, especially in the context of further policy signals from the Federal Reserve in the coming days. The foreign exchange market focuses on the fluctuations of the US dollar, yen and pound, and investors will pay close attention to US data and the latest developments in the UK budget. The crude oil market faces a pattern of multiple factors intertwined, and future geopolitical tensions and changes in winter demand will dominate the direction of oil prices.

The focus of economic data in the past week was on the October non-farm payrolls data released by the US Department of Labor. Affected by many factors, including the invasion of hurricanes and strikes in the aerospace manufacturing industry, non-farm payrolls only increased by 12,000, which was lower than market expectations. At the same time, the unemployment rate remained stable at 4.1%, indicating that the labor market is still resilient overall.

The employment report directly affects the Fed's policy expectations. With the release of the data, the market's probability of the Federal Reserve cutting interest rates by 25 basis points on November 7 has risen to 100%, which is a significant increase from 91% before the data was released.

Next, the Federal Reserve's policy stance and the results of the US presidential election will continue to affect the direction of global financial markets. For traders, paying close attention to the latest market changes, especially various highly watched data, will be a key strategy in the current market uncertainty environment.

Last week, the US stock market closed higher. The non-agricultural rate cut was "set in stone" far below expectations, and Amazon led the rise of large technology stocks. The S&P 500 rose 0.40% to 5728.80 points, recovering some of the losses of the previous day; the Dow Jones Industrial Average rose 288.73 points, or 0.69%, to 42052.19 points; the Nasdaq Composite Index rose 0.8% to 18239.92 points.

Gold prices fell before the weekend (November 1) due to a stronger dollar and stronger U.S. Treasury yields, but weak job growth data in the world's largest economy prompted analysts to increase bets on the Federal Reserve to cut interest rates, limiting some losses.

Spot gold fell 0.32% to $2,734.90 per ounce for the week. Some traders took profits after gold hit a record high of $2,790.20 earlier.

Silver prices rose to $34.550 and $34.553 last week to form a small double top before falling sharply to around $32.440, a low for the week. However, with the prospects of the U.S. presidential election uncertain, longs took profits and left the market, pushing the big high to $34.550 and $34.553 to form a small double top before falling sharply to around $32.440, a low for the week. However, with the prospects of the US presidential election uncertain, longs took profits and left the market, pushing the market down.

Last week, the focus of the foreign exchange market was mainly on the strong rebound of the US dollar, the downward correction of the Japanese yen, and the signs of a rebound in the British pound. The market is concerned that major currencies fluctuate due to the weak US non-farm data, the upcoming presidential election, and the policies of central banks in various countries. As the Federal Reserve's policy meeting approaches, investors should pay attention to the monetary policies and election results of major economies, which may continue to dominate the foreign exchange market next week. On the other hand, after the release of weak employment data, the US dollar index rebounded across the board, and the market focus has shifted to the uncertainty of the US presidential election. This uncertainty has exacerbated the volatility of the foreign exchange market, especially against the backdrop of the upcoming Fed meeting.

The international crude oil market showed a volatile downward trend last week, affected by both geopolitical tensions and supply-side data. The focus of the crude oil market is on the game between geopolitics and economic data. Brent crude oil and US WTI crude oil rebounded slightly in the middle of last week, but the overall weekly closing was still down about 4% and 3% respectively.

Bitcoin plunged before the weekend, and after failing to break through the all-time high of $73,776, it fell back below $70,000. Former U.S. President Trump's chances of winning the November election hit 67% during the week, indicating that the crypto market is betting heavily on his victory. However, given that the U.S. media exposed the platform's suspected wash trading, its chances of winning quickly fell back.

The two-year U.S. Treasury yield is closely related to expectations of Fed action. It initially fell after the release of the employment report, but then climbed from 4.18% late Thursday to 4.20%. The 10-year U.S. Treasury yield also rebounded after a subconscious decline, which also takes into account future economic growth and other factors. The yield rose from 4.29% late Thursday to 4.37%.

Outlook for this week:

Looking ahead to this week, the market will be extremely intense. The U.S. presidential election and the Federal Reserve's decision have attracted much attention. In addition, the decisions of the Australian and British central banks, the election of the Japanese prime minister, the Chinese National People's Congress meeting, and the U.S. Treasury's bond issuance arrangements will all affect the market.

In the US election, Trump and Harris competed fiercely in swing states, with Trump having a slight advantage. The expectation of Trump's election before the election was good for assets such as the US dollar, but this was only a hype theme, and the market pattern would change after the election. If Harris is elected and maintains Biden's policies, non-US assets may be supported and the US dollar may weaken; if Trump is elected, attention should be paid to the impact of his specific policies on the market, including the different effects on US stocks, the US dollar, non-US assets and gold prices, and the changes in market sentiment caused by the new president taking office may also drag down stock indexes and gold prices.

The results of the US congressional elections are also crucial. Different parties in the president and Congress may cause economic panic and suppress the stock market and gold prices, while the same party is conducive to policy advancement and stock indexes.

The Federal Reserve's November meeting is expected to cut interest rates by 25 basis points. There is no position map for the meeting on November 7. The market is paying attention to Powell's speech to explore the signal of a December interest rate cut. Changes in employment and inflation data have caused market concerns about interest rate cuts. Trump's election may affect Powell's actions and bring unexpected market conditions.

The Japanese Prime Minister election will be held from November 7 to 11. Whether Shigeru Ishiba steps down will affect the yen trend and non-US and US dollar markets. The Reserve Bank of Australia may maintain its interest rate policy unchanged this week to support the Australian dollar. The Bank of England is facing expectations of a rate cut due to economic pressure. The governor's speech style will affect the trend of the pound and will consider the monetary policy of the new US president.

The Chinese National People's Congress and the Shanghai International Import Expo are held at the same time, and the market is concerned about the impact of the Chinese central bank's policy on stock indexes. The US Treasury's bond issuance plan can affect bond yields and gold prices.

In short, there are many key events in the market this week, and investors need to be disciplined and rational in their operations.

Given that the presidential campaign is so intense, policymakers at the approximately 20 central banks that set borrowing costs this week may need to be prepared for a long wait for the final results. In modern US elections, losing candidates usually admit defeat within a day or two, but the results of the 2020 election were not announced until four days later.

Outlook for the global economy in the coming week:

The United States and Canada

In addition to the Fed's decision, the upcoming US data include a preliminary estimate of productivity growth in the third quarter.

The Institute for Supply Management will also release a report on the economic services industry in October. The University of Michigan will release its consumer confidence index for early November later this week, against the backdrop of a continued cooling of the underlying labor market.

As for Canada, the Bank of Canada cut interest rates by 50 basis points despite weak inflation and economic growth, and new employment data will give us a glimpse into the state of the labor market. The Bank of Canada will release a summary of the deliberations that led to its decision to cut sharply, and Senior Deputy Governor Carolyn Rogers will speak at the Economic Club of Toronto.

Europe

The Bank of England’s decision on Thursday is likely to attract special attention after the Labour government’s plans for more borrowing and spending unveiled in its budget pushed up UK borrowing costs to their highest level in a year. This tense backdrop is not expected to distract policymakers from further easing for now. All 49 economists surveyed by Bloomberg expect the Bank of England to cut interest rates by 25 basis points on Thursday.

As for Sweden, expectations for the Riksbank have decisively shifted to support a 50 basis point rate cut to 2.75% on Thursday after data showed the economy remains stagnant. Output shrank in the third quarter, and the country’s large export sector is turning more pessimistic. Swedish officials may feel more eager to take steps to help growth after nearly three years of stagnation, especially as inflation has fallen below its 2% target and is likely to remain stagnant there unless domestic demand picks up again.

Asia

Australian officials will keep their cash rate target at 4.35% at the start of the week after consumer prices remained elevated in the three months to September, cementing the idea that policymakers will have to wait before pivoting. The Reserve Bank of Australia will also release a new round of economic forecasts, which could shed light on the timing of potential rate cuts.

South Korea will release its latest inflation data on Tuesday, with data expected to show further easing, supporting the Bank of Korea's policy shift last month. Japan is to release wage data that could keep the Bank of Japan on track to raise rates as planned late this year or early next year, and Australia, Vietnam, Taiwan and the Philippines are to release trade data.