FPG ：U.S. oil prices reversed their gains following the outbreak of the Palestinian-Israeli conflict. In parallel, gold shifted from a rising trend to a falling one. These market movements are often influenced by geopolitical events, reflecting how global uncertainties can impact commodity prices. 1. [Market concern over US inflation] Market concern about U.S. inflation continued to grow as consumer prices rose for the second consecutive month in September. The annual rate of the Consumer Price Index (CPI) in the United States reached 3.7% in September, while the core CPI recorded 4.1%, its smallest increase since September 2021. These numbers support the Federal Reserve's intention to keep interest rates higher for a more extended period. 2. [Steady US job market] The U.S. job market remains robust, with the number of people applying for unemployment benefits holding near all-time lows. This resilience in the labor market persists despite rising interest rates. Data from the week of October 7 showed that initial unemployment claims were 209,000. The four-week average of initial unemployment benefits also decreased, reaching 20.25 million. These figures demonstrate the strength of job security for American workers. 3. [UK GDP rebound] The UK's GDP experienced a slight rebound of 0.2% in August, in line with market expectations, following a 0.6% contraction in July. While this uptick is a positive sign, concerns remain about the economy's performance in the third quarter, especially in the context of elevated interest rates. In these financial updates, we see a recurring theme of inflation and its impact on central bank policies and market dynamics, as well as fluctuations in economic indicators driven by various factors like interest rates and geopolitical events. 4. [South Korea's response to the Palestinian-Israeli conflict] South Korea's Ministry of Industry, Trade, and Resources established a special working group to support its exporters in dealing with the potential impact of the Palestinian-Israeli conflict on their businesses and the country's economy. This proactive approach aims to minimize the negative effects of regional conflicts on South Korea's exports. 5. [Microsoft's tax avoidance dispute] Microsoft has been notified by the IRS to pay an additional $28.9 billion in taxes, along with fines and interest for the fiscal years from 2004 to 2013. The dispute centers around a 2012 IRS audit of transfer pricing, a tax strategy where companies transfer profits to tax havens to reduce U.S. corporate taxes. Microsoft was shifting billions of dollars of profits to locations like Puerto Rico, which has lower corporate taxes compared to the United States. Microsoft intends to appeal the proposed adjustments, a process expected to take several years. 6. [OPEC's prediction of global crude oil demand growth] OPEC, in its October oil market monthly report, maintains its forecast for global crude oil demand growth for this year and the next. OPEC predicts that global crude oil demand in the fourth quarter of 2023 will be 103.13 million barrels per day, and the average annual demand for 2023 will be 100.6 million barrels per day, representing a growth rate of 2.44 million barrels per day compared to 2022. OPEC also forecasts that global crude oil demand in 2024 will be 104.3 million barrels per day, indicating a growth rate of 2.25 million barrels per day compared to 2023. These predictions remain consistent with their September report, suggesting that steady global economic growth and improving conditions in the Chinese economy could drive further oil demand. This might provide an upward momentum for crude oil prices. Kina, a special analyst at FPG, stated: The three major U.S. stock indexes closed down collectively, with the Dow index falling 0.51%, the Nasdaq index falling 0.63%, and the S&P 500 index falling 0.62%. This decline is largely attributed to the ongoing stalemate in the U.S. CPI data for September. The yield of U.S. two-year Treasury bonds reached the 5% threshold, almost completely reversing Monday's volatility. Furthermore, the yield of ten-year U.S. bonds surged by 15 basis points. Given this market sentiment, the unexpected decline in the U.S. stock market ensued. Dawson, a special analyst at FPG, added: U.S. domestic crude oil inventories increased by 10 million barrels per week, and oil production reached a record high. These factors offset the morning's gains, which were driven by regional supply risks stemming from Hamas's attack on Israel. This increase in oil supply led to a notable decrease in crude oil futures. Dave, another FPG analyst, weighed in: On the European side, the European Central Bank has announced its intention to continue reinvesting maturing securities in the PEPP portfolio until the end of 2024. However, as of now, there is no compelling reason to take such an action. Concerning the possibility of interest rate cuts in the coming months, it's not solely based on economic data falling below expectations. The European Central Bank would need several unexpected economic data points to significantly underperform to necessitate a preemptive interest rate cut. Yue Lin, a special analyst at FPG, also provided insights: Currently, British household energy debt has surged to a record high of £2.6 billion. Regulators are contemplating adjustments to the price ceiling. What's concerning is that more and more households are accumulating energy debt, even during the warmer months, with some families needing to borrow money to cover their electricity costs. Raising the price ceiling to address mounting debt will place additional burdens on households' bills. Although UK energy bills have seen a slight decline in October, the gradual reduction of British government subsidies implies that households may still face increasing costs in the months ahead. Estimates suggest that a third of households will contend with higher bills, placing pressure on the government to implement additional measures to help alleviate the cost of living. Consequently, the current environment remains highly unfavorable for pound bulls. The above analysis is only for the views of market researchers and is for reference only and is not Regarded as a specific investment suggestion. #Forex #trading #tradingforex