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Last week, the Federal Reserve's decision was the most crucial factor in the market. With the release of the dot plot and a hawkish signal from Federal Reserve Chairman Powell, the US dollar continued its recent strong performance, ending the week with a ten-week winning streak. The US Dollar Index, which tracks the dollar against six major currencies, rose by 0.19% last week, closing at 105.58, marking its tenth consecutive weekly gain and the longest upward trend in nearly a decade. On the other hand, the Bank of England unexpectedly kept interest rates unchanged, putting pressure on the British pound. The Bank of Japan did not provide a clear signal of a policy shift, leading to continued depreciation pressure on the yen. Japan issued warnings about intervention in the foreign exchange market several times last week, and investors need to be cautious of intervention risk this week. Additionally, the upcoming week will see a significant amount of economic data releases in the United States, which could impact the US dollar, gold, and stocks. Key data points include US GDP and PCE inflation data.
Powell maintained a hawkish stance last week, stating that interest rates would have to remain in a restrictive range in the foreseeable future, which strengthened the US dollar. However, gold managed to resist the pressure from the strong dollar, ending the week with a slight gain of 0.06% at $1924.80.
In the coming months, global oil reserves are expected to decrease, which could help stabilize domestic fuel costs or lead to an increase in barrel prices. OPEC+ oil-producing countries continue to consider production cuts. Last week, oil prices initially rose to a 10-month high of $92.23 but ended the week down by 0.50% at $89.88.
US stocks closed lower on Friday. All three major indices recorded significant declines last week as investors focused on the Federal Reserve's policy stance, the risk of a US government shutdown, and the developments in the strike by US auto workers. The Dow Jones Industrial Average (Dow) fell by 1.89% to close at 33,963.84 points, the S&P 500 index dropped 0.23% to 4,320.06 points, and the Nasdaq Composite fell 0.09% to 13,211.81 points.
Looking ahead to this week, key data points to watch include Germany's September IFO Business Climate Index, US August seasonally adjusted annualized new home sales, US September Conference Board Consumer Confidence Index, API and EIA crude oil inventory changes as of September 22nd, August durable goods orders in the US, initial jobless claims in the US for the week ending September 23rd, Japan's September CPI, and the Eurozone's September CPI. Events to watch include speeches by ECB President Lagarde, Minneapolis Fed President Kashkari, and the release of minutes from the Bank of Japan's July monetary policy meeting.
Here's an overview of important events for the week (Beijing time):
Monday (September 25th): Germany's September IFO Business Climate Index, speech by ECB President Lagarde, and speech by Bank of Japan Governor Kuroda
Tuesday (September 26th): US August seasonally adjusted annualized new home sales, US September Conference Board Consumer Confidence Index, speech by Minneapolis Fed President Kashkari
Wednesday (September 27th): API and EIA crude oil inventory changes in the US as of September 22nd, August durable goods orders in the US, release of minutes from the Bank of Japan's July monetary policy meeting
Thursday (September 28th): Initial jobless claims in the US for the week ending September 23rd
Friday (September 29th): Japan's September CPI, Eurozone's September CPI
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