Scarcely had the Venezuela episode quietened than America began casting around for ways to rattle Iran—a sign that Donald Trump is unlikely to lie low before the 2026 midterms. With voters demanding lower inflation and reliable energy supplies, he must be seen to deliver on those pledges. For Mr Trump, the midterms matter more than most.With both chambers of Congress in Republican hands, Mr Trump’s legislative agenda can glide through with little more than a nod from Capitol Hill. But if the midterms strip his party of either the Senate or the House, his second term will soon resemble his first: gridlocked, frustrated, and reduced to bargaining endlessly with Democrats just to get anything done—a president in name only.The consequences of striking Iran?If America follows through, markets w

At the start of the new year, the drama keeps coming. Over the weekend, the United States launched an operation, directly apprehending Venezuela’s president and bringing him to the U.S. for trial; the speed of the action and the precision of the intelligence once again demonstrated America’s military capabilities. Although there are rumors that the operation went so smoothly because there was an insider, being able to secure an insider is itself a reflection of military strength. Since the incident both occurred and concluded over the weekend (many recent military operations share this style: short duration, clear objectives, and no sustained escalation in responses from either side), for financial markets it would likely be digested within the few hours from Monday’s open through the Asia

The U.S. stock market saw a pullback, and while a decline in equity indices is entirely normal, an intraday headline made the move particularly noteworthy. Markets had largely assumed the next Federal Reserve Chair would be White House chief economic adviser Kevin Hassett. However, last Friday (local time), President Trump said that as he considers a successor to Powell, he is leaning toward “two Kevins”—Kevin Warsh and Kevin Hassett. Although Hassett has been viewed as the front-runner, Trump noted that after a 45-minute White House meeting with Warsh on Wednesday, Warsh has also entered his top tier of preferred candidates. That news contributed to a pullback in U.S. equity indices, suggesting that markets view Warsh as a relatively hawkish option whose comments may be amplified further,

A significant market movement for gold and silver is anticipated leading up to the Federal Reserve's final meeting of the year. The market widely expects the Fed to continue cutting interest rates, with some even forecasting another cut in January. However, with the market having already priced in the likely successor to the Fed chair, this meeting is drawing less attention than usual. The primary source of uncertainty may lie in the differing opinions among the voting members. In the near future, the market is likely to focus more on the statements of the "shadow" Fed chair to predict the future path of rate cuts, potentially making the market less sensitive to Fed meetings until the leadership transition is complete.​Gold Awaits a Clearer Path for Rate CutsDespite strong expectations for

Next week marks the start of December, and in overseas markets December is usually a fairly quiet month. When there has already been sufficient volatility in the first eleven months, as long as there is no sudden news in December, institutional traders and fund managers generally trade cautiously in order to avoid overtrading and hurting their year-end performance. This year, volatility has already been large due to global trade and tariff headlines, and with the market also expecting a Fed rate cut in December, price swings in December may be smaller than in November. U.S. equity indices might even enter the Christmas season early, meaning light trading and a lukewarm, directionless market.​Over the weekend, an unverified rumor suddenly spread that Fed Chair Jerome Powell would announce h

Last week’s U.S. non-farm payroll data attracted widespread attention due to severe market disagreements and the need for official data to guide trading decisions.As the first official data released after the U.S. government shutdown ended, although it was delayed by two months, it still provided a baseline for the market's subsequent trend. Before the release, the market had largely withdrawn expectations for a Federal Reserve rate cut in December, with the probability dropping below 50%, which was a main reason for the stock index decline last week. After the data release, Federal Reserve officials voiced mixed views, with both dovish and hawkish statements highlighting significant divergence ahead of the December Fed meeting. Dovish comments raised the odds of a rate cut and boosted sto

The most important event this week is the release of the first nonfarm payrolls report following the shutdown of the U.S. government. This September nonfarm payrolls report was originally scheduled for release in early October, but due to the U.S. government shutdown it has been postponed to 21:30 Beijing time on November 20. At this stage, the market is unable to fully anticipate this report; after all, with a report coming after a 40‑day shutdown, nobody knows the path of the data from here or how much impact it will have on the Federal Reserve’s rate‑cutting process. According to probability data from CME’s FedWatch tool, the odds of a rate cut versus no cut in December have already narrowed to roughly fifty‑fifty, and the public statements by Federal Reserve officials are also highly d

Following the conclusion of the China-US summit in Busan, South Korea, the trade war between the two countries has effectively been put on pause, providing a "reassuring measure" for the global economy. The 24% retaliatory tariffs have been suspended for one year. This one-year suspension is significant because it coincides with the upcoming US midterm elections, and there remains considerable uncertainty whether the Republican Party, led by Trump, will maintain control over both chambers of Congress, which will directly impact the trajectory of US trade negotiations. From the current perspective, at least for one year the market's worries about China-US trade frictions can greatly ease. With the exception of precious metals, this is generally positive news for other asset classes.The succ

As the end of the month approaches and the November 1 deadline for the US to impose significant tariffs on China looms, the US is increasingly eager to engage in trade talks with China. At this stage, continuing to raise tariffs would harm the US more than benefit it, thus giving China the upper hand in negotiations. Starting this week, information and outcomes from both sides' negotiations will gradually emerge. While a comprehensive deal is unlikely in one round, some progress is expected, which will help revive global trade.China-US Talks to Boost Commodity PricesThe tariff policies previously caused significant disruption in global trade and economics. As negotiations between these two major economies advance, market reactions to tariffs have become less reactive. Although tariff issue

With the U.S. government still shut down and no sign of a deal, the standoff could break duration records and prolong risk sentiment, whose economic impact remains to be seen but is unlikely to fade quickly in the near term. Hopes that the Israel–Gaza conflict might cool were dashed by fresh airstrikes in Gaza over the weekend, underscoring that peace will not be achieved overnight and that safe-haven demand may be repeatedly rekindled, fueling large price swings driven by sentiment rather than trend change. In such an environment, countertrend trading requires extra caution because volatility in a sentiment-led market does not automatically mean the underlying trend has reversed.​Has precious metals topped?Drawing on years of futures-market experience, the piece notes that while every squ

The U.S. government has once again fallen into a shutdown, with no signs of resolution so far. Market expectations estimate the shutdown will last between 15 to 29 days. Although this is not the first shutdown the U.S. government has faced, the market remains relatively calm for now. However, the shutdown delays the release of many critical economic data, preventing the Federal Reserve from making informed policy decisions based on the latest economic indicators. This uncertainty clouds the path toward interest rate cuts, leaving the market to continue operating along the current trend.Impact of the Shutdown on U.S. Stock IndexesThe longer the shutdown lasts, the more significant the damage to the U.S. economy will be. This is almost unimaginable in China, given the much broader government

The Resumption of Interest Rate Cuts and the Narrowing US-China Interest Rate Differential Continue to Attract Capital Inflows to ChinaThe Federal Reserve has finally started cutting interest rates again after much anticipation. There are various interpretations in the market—some believe the cut was less than expected (not a 50 basis points cut), while others view it positively. Regardless of interpretation, one fact must be clear: the Fed has indeed cut interest rates. With US rates declining, the interest rate differential between China and the US will narrow, unless the People's Bank of China follows with analogous rate cuts. This narrowing differential likely sustains the ongoing appreciation of the renminbi.Renminbi Appreciation Cycle ContinuesBack in April, it was noted that this ye

Next week marks the Federal Reserve's interest rate decision meeting. Due to the significantly lower-than-expected nonfarm payroll data in August and September, the focus of the Fed’s meeting will be on the magnitude of the rate cut. A 25 basis point cut is market-expected and can be understood as a hawkish cut, not necessarily positive news. A 50 basis point cut would slightly exceed market expectations, so attention should be paid to the Fed Chair’s speech to judge the path and speed of further cuts. If large-scale cuts continue, the market will likely respond enthusiastically.How will U.S. stock indices react to the Fed meeting?Although weak economic data puts fundamental pressure on U.S. stock indices, the considerable room for rate cuts by the Fed means the market has not yet priced i

The latest nonfarm payroll report, released last Friday ahead of the Federal Reserve’s September meeting, mirrored the prior month’s disappointing data, significantly missing market expectations and accompanied by downward revisions of previous figures. This reinforced market anticipation that the Fed would begin cutting rates in September, with CME and Bloomberg markets pricing in three 25bps rate cuts this year. Historically, the Fed has refrained from easing because of a robust U.S. economy, implying no urgent need for rate adjustments. However, the sharp downward revision in nonfarm employment raises the probability of rate cuts while simultaneously reviving fears of an economic recession in the U.S. that had been looming for two years. This dual effect led to a bifurcated market respo

Next week marks the first week of September, and since September 1 is the U.S. Labor Day holiday, the market will be closed for one day. Although electronic trading will still take place, it is expected that volatility will remain relatively subdued, and the market trends may not be reliable.It is advisable to observe more and act less during this period. When trading resumes after the holiday, it will usher in the key U.S. data week at the beginning of the month, accompanied once again by the impact of large-scale non-tradable shareholder (big and small 'non') movements. Although nonfarm payroll data is released monthly and should be routine, the current market expectations have priced in that the Federal Reserve will begin cutting interest rates at the September meeting, with even aggres

Last Friday night, at the highly anticipated Jackson Hole Global Central Banking Symposium, Fed Chair Jerome Powell delivered remarks that diverged from what many in the market had expected. Instead of projecting a strongly “hawkish” stance, Powell softened his tone and stated:“Since policy is already in restrictive territory, given changes in the outlook and the balance of risks, it may be necessary to adjust our policy stance.”This was widely interpreted as a clear signal that the Fed is preparing to cut rates in September. According to the CME FedWatch Tool, the probability of a 25-basis-point rate cut next month has risen to 89%. Unless there is a major surprise in the U.S. nonfarm payrolls report at the beginning of September, the path toward renewed rate cuts seems almost certain.1.