Oil prices plummeted 6% Japanese political earthquake yen plummeted

On Monday (October 28th), international crude oil futures prices plummeted by over 6%, marking the largest single-day drop in more than two years. Israel avoided attacking Iran's oil or nuclear facilities, and in addition, Israeli Prime Minister Netanyahu made a rare statement that he is willing to implement a brief ceasefire in the war between Israel and Hamas, indicating a de-escalation of tensions in the Middle East, leading to a significant drop in oil prices. Spot gold prices fell sharply during trading on Monday but recovered most of the losses by the close, rising back above $2,740 per ounce.

Closing prices on October 28th:

Forex: EUR/USD closed at 1.08100; GBP/USD closed at 1.29691; USD/JPY closed at 153.238; AUD/USD closed at 0.65828; USD/CAD closed at 1.38904; USD/CHF closed at 0.86444.

Commodities: Spot gold closed at $2,742.05 per ounce; spot silver closed at $33.654 per ounce; NYMEX crude oil closed at $67.38 per barrel; Brent crude oil closed at $71.42 per barrel.

Key news review:

1. The yen exchange rate fell to a three-month low on Monday (October 28th).

Japanese politics "earthquake"! Ishinomaki receives a "bolt from the blue" as the yen plummets to a three-month low.

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2. On Monday (October 28th), spot gold prices opened with a significant gap down, and in the Asian morning session, gold prices once fell below $2,725 per ounce; however, gold prices recovered most of the intraday losses, and by the end of the day, gold prices rose back above $2,740 per ounce.

Iran speaks "harsh words"! After a significant gap down, gold prices strongly return to above $2,740, how to trade gold?

3. The yen's decline expanded to 1% on Monday, while the Japanese stock market rose, as investors considered the impact of the LDP and its coalition partners losing their majority seats. The yen's exchange rate against the US dollar fell to 152.544, after four consecutive weeks of decline. Since the Bank of Japan's rate hike at the end of July, the yen has given up all its gains, and with political uncertainty clouding the trajectory of interest rates, the risk of authorities potentially re-entering the market to protect the yen has increased.The Japanese yen continues to fall, while the Japanese stock market rises.

4. Currently, the market is reminded that this week will determine the Federal Reserve's actions in November. Another rate cut or a pause? These seem to be the two options presented to Federal Reserve policymakers at their next meeting on November 6th and 7th, and two reports on inflation and the labor market this week may influence the final outcome.

Will the Federal Reserve continue to cut rates or take a breather? These two key data points this week will have the final say.

5. On Monday, gold prices soared significantly this year. Last week, the price of this precious metal reached a historical high of $2,758.37 per ounce, and it has risen for six out of the past seven weeks.

How has gold become one of the hottest global investments, according to American media?

6. The Canadian federal government announced last week that by 2025, it will reduce the number of permanent residents it accepts by about 20%; by 2027, this figure will continue to decline by about 4% annually. This decision was made against the backdrop of Canada's population growth having been at the top of the world in recent years.

Will Canada's reduction in immigration cause controversy, with economic growth expected to be only 1% in the next two years?

7. On Monday, Apple's stock price edged higher in the U.S. market, but it is still in a downtrend for the month. Two top Wall Street analysts have given mixed forecasts for the tech giant's upcoming fourth-quarter earnings report.

Top analysts reevaluate Apple's stock outlook, focusing on the key fourth-quarter earnings report!

Foreign exchange marketThe US dollar edged lower on Monday as investors took profits ahead of key data releases this week. The Japanese yen hit a three-month low against the US dollar due to political and monetary policy uncertainties triggered by the ruling coalition's election loss in Japan.

The US Dollar Index (DXY), which tracks the greenback against six major currencies, fell slightly by 0.07% to 104.31. The DXY has risen 3.6% so far in October and is on track to record its largest monthly gain since April 2022.

The recent strength of the US dollar has been primarily driven by signs of a robust US economic performance.

As of Monday's close, the US dollar/Japanese yen rose by 0.6% to 153.24. The US dollar/Japanese yen hit a high of 1% during Monday's trading, reaching 153.88, the highest level since the end of July.

Analysts at BNY Mellon pointed out that the next target for the US dollar/Japanese yen would be 155, while 160 could be the critical point for intervention by Japan's Ministry of Finance.

In other major currency pairs, the euro/dollar rose by 0.15% on Monday,报价1.0810. The British pound/dollar increased by nearly 0.1%,报价1.2969.

Stock Market

On Monday (October 28), the stock market rose as investors anticipated that earnings from a batch of large tech stocks could continue to propel the Nasdaq Composite Index higher.

The S&P 500 Index increased by 0.27%, closing at 5,823.52 points; the Dow Jones Index closed up by 273.17 points, a 0.65% increase, at 42,387.57 points; the Nasdaq Index closed up by 0.26%, at 18,567.19 points.

On Monday, European stocks closed higher, with a strong afternoon performance as investors focused on the geopolitical situation in the Middle East. After some fluctuations in the morning, the Stoxx 600 Index eventually closed up by 0.41%, at 520.95 points. Media and construction stocks rose by 1.6% and 2%, respectively, while oil and gas stocks fell by 1.4% due to a decline in oil prices.The FTSE 100 closed at 8,285.62 points, up 0.45%; the German DAX closed at 19,531.62, up 0.35%; the French CAC 40 closed at 7,556.94, up 0.79%; the Italian FTSE MIB closed at 35,016.44, up 0.69%; the IBEX 35 closed at 11,904, up 0.77%.

Commodity Market

On Monday, spot gold opened significantly lower, and in the Asian morning session, the gold price briefly fell below $2,725 per ounce; however, the gold price recovered most of the intraday losses, and by the end of the day, the gold price had risen back above $2,740 per ounce.

As of Monday's close, spot gold was reported at $2,742.05 per ounce, with a daily decline of nearly 0.2%; the lowest price during the trading session fell to $2,724.64 per ounce.

FXStreet analyst Christian Borjon Valencia pointed out that gold traded slightly lower on Monday, dragged down by the rise in U.S. Treasury yields. The U.S. 10-year Treasury yield continued to climb, increasing by 3 basis points to 4.272%.

The U.S. Dollar Index is heading towards its strongest monthly gain since April 2022, which reduces the attractiveness of gold to overseas buyers.

TD Securities commodity strategist Daniel Ghali believes that gold prices will definitely reach $2,800 per ounce this week. Ghali said, "Our expectation is that the election will actually suppress the market's willingness to sell gold, so any factor that stimulates buying activity could have a greater impact."

Analyst Rhona O'Connell stated, "Gold is still in a buy-the-dip pattern. Although some investors who want to enter have been waiting for a drop of more than $200, the gold price has not seen such a deep decline as others have been entering the market during gold price corrections."

O'Connell added, "Although one of the key geopolitical risks this year is the excessive number of elections, with more than half of the world's voters having the opportunity to vote, uncertainty will not disappear with the end of the elections."

In terms of silver, spot silver closed down 0.13% on Monday, at $33.654 per ounce.In the crude oil sector, international crude futures prices plummeted by over 6% on Monday, marking the largest single-day drop in more than two years. Israel's avoidance of attacking Iran's oil or nuclear facilities signifies a de-escalation of tensions in the Middle East, leading to a significant decline in oil prices.

The West Texas Intermediate (WTI) crude oil futures for December delivery at the New York Mercantile Exchange fell by $4.48, a decrease of 6.13%, reaching the largest single-day drop since the 7.93% plunge on July 12, 2022, closing at $67.38 per barrel.

The Brent crude oil futures for December delivery at the洲际交易所 in Europe dropped by 6.09%, closing at $71.42 per barrel.

Last Saturday, Israel attacked Iran's military facilities in three provinces in response to Tehran's ballistic missile launch towards Israel on October 1st. The attack bypassed locations housing oil, nuclear energy, and civilian infrastructure. Iranian oil industry media stated that Iran's petroleum industry operations are "proceeding as normal" without interruption.

Prior to this, concerns about attacks on Iranian oil facilities have risen in recent weeks. According to the U.S. Energy Information Administration, Iran accounts for 4% of the global oil supply.

Additionally, Israeli Prime Minister Netanyahu expressed his willingness to implement a brief ceasefire in the Israel-Hamas war in exchange for the release of some of the approximately 100 hostages currently held by Hamas in Gaza.

Netanyahu's statement came after his talks with senior officials from Qatar and the United States in Doha on Monday. The talks aimed to revive the ceasefire negotiations that have been stalled since Israel's assassination of Hamas leader Sinwar earlier this month. The central topic of discussion was a plan proposed by Egypt, one of the mediators between the warring parties.

Hamas has not yet commented on this and has not sent representatives to attend this ceasefire negotiation. If an agreement can be reached, this will be the first ceasefire between Israel and Hamas since the exchange of hostages during the brief truce in late November last year.

Senior market analyst Antonio Ernesto Di Giacomo stated that Israel's attack avoided important facilities such as Iran's nuclear and oil facilities, greatly reducing the uncertainty in the market over the past few weeks.

Peter McNally, the Global Head of Analysts at Third Bridge, said that previously Third Bridge analysts believed that "the possibility of Israel attacking Iranian facilities was very low," and now this move has merely eliminated some short-term uncertainty.McNally stated that oil has now returned to the fundamentals of supply and demand. "Seasonally speaking, we are in a period of weak demand, and unless there are any supply disruptions, inventories are expected to rise."