GOLD: Gold Range Trading On Uncertain Fed Outlook & Wait For US-China News
Gold prices reached $3966.52/oz earlier before falling to $3915.52 but are now 0.2% higher on the day at $3938. Its relatively narrow range reflects uncertainty over the Fed outlook with Chair Powell noting the variation in views. There were two dissenters this month with a vote for no change and one for a 50bp cut. The lack of data is also clouding the outlook. It has found support from a slightly lower US dollar and 2-year yield but stronger US equity futures are offsetting this.
- Presidents Xi and Trump have just met in South Korea with no announcements yet, which may be supporting bullion’s latest uptick.
- US Treasury Secretary Bessent said earlier this week that a draft US-China trade agreement had been reached. There have also been comments that China will increase its US soyabean imports. The hope is that a deal will avoid additional 100% US tariffs on 1 November and ease restrictions of China’s rare earth mineral exports needed for tech production.
- Silver has been in a narrow range today. It is down 0.1% to $47.53 off the intraday low of $47.269. It reached $47.970 earlier in the session. Both gold and silver remain in overbought territory.
- Later the Fed’s Bowman gives pre-recorded remarks and Logan speaks at a bank funding conference. The ECB decision is expected to be on hold. Euro area Q3 GDP, EC October survey, German preliminary CPI & September unemployment print.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
MNI EXCLUSIVE: RBNZ To Eye 2% OCR Level - Ex Assistant Governor
A former RBNZ Assistant Governor shares his OCR outlook.
On MNI Policy MainWire now, for more details please contact sales@marketnews.com
US TSYS: Yields Relatively Unchanged In A Very Quiet session
The TYZ5 range has been 112-16 to 112-17+ during the Asia-Pacific session. It last changed hands at 112-17, up 0-00+ from the previous close.
- The US 2-year yield is trading 3.619%.
- The US 10-year yield is trading around 4.139%.
- 10-Year yields drifted lower as the market prices in a US shutdown, I suspect buyers continue to be around 4.20% initially and look to fade the move higher. The jobs data if released will be key this week and if not then the ADP starts to take on a lot more relevance.
- Bloomberg - "JD Vance said he believes the US government is heading for a shutdown, blaming Democrats for refusing to approve a short-term spending bill. Donald Trump and top congressional leaders failed to reach an agreement in a meeting before the Oct. 1 deadline."
- MacroEdge on X: “Government shutdown odds surge as Vance leaves meeting saying ‘we’re headed to a shutdown’ & GOP lacks votes to pass funding bill.” See Polymarket Odds Below.
- “Markets aren’t rushing to reduce risk exposure, having seen plenty of US shutdown threats before, Vishnu Varathan, head of macro research for Mizuho Securities, writes in a note” - BBG
Data/Events: FHFA House Price Index, S&P Cotality CS 20-City, MNI Chicago PMI, JOLTS Job Openings, Conf. Board Consumer Confidence, Dallas Fed Services Activity
Fig 1: Polymarket Odds Of A US Shutdown
Source: MNI - Market News/Bloomberg Finance L.P
CHINA: Bond Futures Rise in Morning Trade
- After doing very little Monday, bond futures have started Tuesday off with a rally.
- The 10-Yr is up +0.10 at 107.76 and is near to the 20-day EMA of 107.81
- The 2-Yr future is up +0.01 at 102.35 and is near the 20-day EMA of 102.36.
- The 10-Yr government bond is at 1.88%
