On Tuesday (2nd), the Federal Reserve held two consecutive days of FOMC meetings and will announce its policies on Wednesday (3rd) evening. Some economists believe that it is almost certain that the Federal Reserve will announce the start of a contraction. In addition, on the same day, the United States will also release "small non farm" ADP employment and non manufacturing PMI data, which may trigger fluctuations in gold prices.

Recently, inflationary pressure has continued to rise, and global central banks have taken measures to cool down. However, the market has basically digested the news of the reduction and shifted its focus to the scale of the reduction and the timing of interest rate hikes.

Economist Anna Wong said it is almost certain that the Federal Reserve will announce a reduction at this meeting, including speed, timing, and some details. Given the recent sustained high prices and wages, the Federal Reserve is likely to initiate a reduction in mid November or mid December.

As for the scale of the reduction, investment firm Columbia Threadneedle pointed out that the Federal Reserve may adopt a faster pace than expected, such as cutting $30 billion per month instead of the expected $15 billion, in order to start raising interest rates faster.

Looking back at Powell's earlier speech, he stated that the Federal Reserve has another stricter standard for interest rate hikes, and currently the US labor market is still some distance from that standard. Nevertheless, some analysts believe that if the US economic recovery continues to be strong, it may trigger a rate hike by the Federal Reserve.

Earlier, many Fed officials also called for the Fed to raise interest rates for the first time as early as 2022.

Two important data points within the day may predict the outlook for the US economy

In addition to the interest rate resolution announced by the Federal Reserve, the market will also receive two key data, one is ADP employment, known as "small non farm", and the other is non manufacturing PMI data.

According to financial media, the ISM Manufacturing Purchasing Managers' Index for October released yesterday rose to 60.8, while data above 60 is rare, which may indicate strong performance in this week's non farm report. Analysis predicts that non manufacturing ISM and October ADP "small non farm" data may remain strong, with ADP employment expected to reach 450000.

This week may see fluctuations in gold prices

With the announcement of interest rate resolutions and multiple policies, the trend of gold prices may be affected. As of Tuesday's close, gold prices have slightly declined due to the rise of the US dollar and US stocks. In early trading on Wednesday in Sanya, spot gold remained stable around $1787.

In terms of the yield of the US 10-year treasury bond, it fell 2.6 basis points to 1.547%, while the yield of the two-year treasury bond, which hit a 19 month high last week, hit the biggest drop since February, falling to 0.444% at one time.

Some analysts believe that investors are waiting for the Federal Reserve's resolution to be announced. In addition, the non farm data released on Friday will also show the progress of the US labor market, which may affect the timing of the Federal Reserve's interest rate hike.

Disclaimer:

The above content only represents the opinions of analysts and is for reference only. It is not considered as a basis or invitation for any transaction and does not constitute investment advice for anyone. Doo Prime cannot guarantee the accuracy or completeness of this content, and is not responsible for any losses caused by the use of this report. You cannot rely on this content to replace your independent judgment. There are risks in the market, and investment needs to be cautious.

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