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On September 18, HDFC Securities CEO Dhiraj Relli stated that the Federal Reserves interest rate cuts could make emerging markets like India more attractive to yield-seeking investors, potentially driving capital flows back into these markets. Relli noted that rising valuation risk premiums due to geopolitical concerns and trade tensions have led foreign institutional investors to be cautious about Indian stocks. He added that a mutually beneficial trade negotiation solution with the United States would eliminate policy uncertainty and restore foreign institutional investors confidence in the Indian market. He expects an earnings recovery in the second half of fiscal year 2026, which in turn will boost Indian stock prices. He stated that Indias structural growth story is likely to remain intact, supported by factors such as growing middle-class consumption and a thriving startup ecosystem.On September 18th, the US dollar weakened across the board after the Federal Reserve cut interest rates, and the Japanese yen briefly rose. However, as traders digested the information and realized the Fed was more hawkish than the market was pricing in, the USD/JPY exchange rate ultimately erased all losses and surged. The dot plot shows that the FOMC, by a narrow majority, expects two more rate cuts in 2025, while the remaining officials expect only one or no cuts. Furthermore, the Fed projects one rate cut in 2026, while the market had been pricing in three before the decision. Furthermore, Fed Chairman Powell, calling the rate cut a "risk management" action, remained fairly neutral. Looking ahead, the key will be the data. Strong data could trigger a hawkish shift in interest rate expectations and support the US dollar. On the other hand, weak data could continue to put pressure on it. For the Japanese yen, the fundamentals have yet to materially change. The yens gains are primarily driven by market expectations of a dovish Fed. Tomorrows Bank of Japan interest rate decision is expected to keep rates unchanged, and its forward guidance is expected to impact the yen.Kuwaiti Oil Minister: If Russian oil is subject to sanctions, it is expected to have a positive impact on oil prices.On September 18th, European stocks generally opened higher, with the German DAX index rising over 1% and the Euro Stoxx 50 index rising nearly 1%. French, Spanish, and Italian stock markets also saw gains. Meanwhile, US stock index futures also rose, with S&P 500 futures up 0.5%. Investinglive, a well-known financial website, commented that the Federal Reserves interest rate decision on Wednesday wasnt overly dovish, but overall, it still offered some positive news for risky assets. As is often the case with the stock market, bargain hunters will, in one way or another, shift the market narrative in their favor. The key now lies in US data proving that the dovish market pricing in October and December was misplaced.Hong Kong stocks rebounded slightly, with the Hang Seng Tech Index narrowing its decline to less than 1%, after falling 2.5% earlier; the Hang Seng Index is now down 1.27%, while Pop Mart (09992.HK) bucked the trend and rose by more than 4%.

International gold prices hit a one-month high, US inflation is high, FED has not yet eliminated internal strife

Oct 26, 2021 11:03

On Thursday (October 14), the international gold price hit a new high of US$1,797.59 per ounce since September 15. The US consumer price index rose further in September. The Fed’s decision-makers still have differences in judging the threat of high inflation. The US dollar index and US bond yields The rate continues to fall.

At GMT+8 16:42, spot gold rose 0.14% to 1,795.51 US dollars per ounce; the main COMEX gold contract rose 0.10% to 1,796.5 US dollars per ounce; the U.S. dollar index fell 0.20% to 93.834.


The US consumer price index rose by 5.4% year-on-year in September, and may strengthen further amid soaring energy prices. This may force the Fed to act as quickly as possible to normalize monetary policy.

The minutes of the Fed’s September meeting show that the Fed may begin to reduce stimulus measures in mid-November. Although more and more policymakers worry that high inflation may last longer than expected, they still have differences on how quickly they need to raise interest rates to deal with high inflation.

U.S. President Biden urged the private sector on Wednesday to help alleviate congestion in the supply chain that could disrupt the holiday season in the United States, and said that the White House plans to inspect the blocked system nationwide.

White House officials said that Americans may face price increases due to supply chain issues, and there may be vacancies in store shelves this Christmas shopping season. White House spokesperson Psaki told reporters that Biden cannot guarantee that there will be no shortages during the holiday shopping season.

Goldman Sachs Chief Operating Officer John Waldron said in an online dialogue held by the International Finance Association (IIF) on Wednesday that he believes that inflation is the number one risk that may damage the global economy and stock markets. The short-term risks to economic recovery are still from the possible long-term risks to emerging markets."

Jeffrey Halley, senior market analyst for OANDA Asia Pacific, said: "I expect the U.S. dollar and long-term interest rates will resume their climb sooner or later, while the gold rally will begin to fade as soon as possible. The 100-day and 200-day moving averages are between $1795.00 and $1800.00. I believe that this area will become a huge obstacle to further increases in (gold prices)."

According to people familiar with the matter, in the face of rising energy costs worldwide, the White House has been discussing with US oil and gas producers in recent days how to help reduce rising fuel costs.

But industry insiders said that any call from the White House to increase production may fall on deaf ears. The industry is also dissatisfied with some of President Biden’s earlier actions, including a suspension of drilling on federal land.

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