The US dollar rose for the fourth consecutive week this week, with USD/JPY up 281 points on a weekly basis, as investors lowered their expectations for the extent and speed of the Fed's interest rate cuts due to a series of positive US economic data. Despite the strength of the US dollar, gold continued to rise strongly this week, hitting a record high during the session. Uncertainty about the US election and speculation that Israel will attack Iran have been supporting gold prices this week.

Before the weekend (October 25), US stocks closed mixed. Stocks struggled as new issues with the Federal Reserve's interest rate policy put pressure on investors' risk appetite. The Dow Jones Industrial Average fell 0.62% to close at 42,114.40 points; the S&P 500 fell slightly by 0.03% to close at 5,808.12 points; and the Nasdaq rose 0.56% to close at 18,518.61 points, hitting a record high during the session.

Gold prices rose slightly last week after shaking off profit-taking, while palladium prices extended gains to a 10-month high, supported by tensions in the Middle East and the U.S. election. Spot gold rose 0.95% to $2,747.50 an ounce for the week, rising for the third week in a row. Gold prices hit a record high of $2,758.50 on Wednesday. Israel began its attacks on Iran in the early hours of Saturday morning in retaliation for Iran's massive ballistic missile attack on October 1. Watch for precious metals early this week.

After silver prices hit a more than 12-year high of $34.870 early last week, the rise of the white metal seemed to pause temporarily as U.S. Treasury yields extended their gains, and plunged to a weekly low of $33.145 before the weekend. Israel began its attacks on Iran in the early hours of Saturday morning in retaliation for Iran's massive ballistic missile attack on October 1. Watch for precious metals early this week.

Last week, the global foreign exchange market performed diversely. The US dollar remained strong under the support of strong data, the yen rebounded before the Japanese election and the central bank's decision, while the euro and the pound were constrained by weak economic performance, and the Canadian dollar benefited from rising oil prices. The Australian dollar tested a 12-week low. Overall, the rise in the US dollar index led to adjustments in major currencies, and the strong performance of US economic data cooled the market's expectations for the Fed's interest rate cut, further boosting the dollar. The US dollar index performed strongly last week, rising 0.82% to 104.31, rising for the fourth consecutive week.

In the coming week, the focus of the foreign exchange market will continue to be on the Fed's policy path, while non-farm payrolls data, oil price changes and the Bank of Japan's policy adjustments will be the main variables that affect the market.

Last week, international crude oil futures prices rose. Investors are evaluating the ongoing conflict and ceasefire negotiations in the Middle East, as well as the US election early next month. Based on the most active contracts, Brent crude oil rose 4.09% this week, while US WTI crude oil rose 3.7% last week. The price of West Texas Intermediate (WTI) crude oil futures for December delivery on the New York Mercantile Exchange rose by $1.59, or 2.26%, to $71.78 per barrel last Friday. WTI crude oil closed at $71.55 per barrel for the week, up 3.97%.

After hitting a high of $69,519 at the beginning of last week, Bitcoin continued to fall back to $65,260 during the week and rebounded to $67,700 before the weekend, showing that the price of the currency was fiercely fighting between bulls and bears before the November election. Former US President Trump's chances of winning once soared to 66.3%. Given his shift to support Bitcoin and his promise to establish a US Bitcoin national reserve, the currency circle made crazy bets on him.

The 10-year US Treasury yield fell slightly after hitting a three-month high of 4.26% earlier this week, and was slightly flat on Friday, but still around 4.18%. It shows that the volatility of the bond market continues to rise. The 2-year Treasury yield fell slightly to 4.064%. Yields move inversely to prices. One basis point is equal to 0.01%. Meanwhile, the VIX index, which measures market volatility, climbed to 19 points, up significantly from 15 a month ago.

Outlook for this week:

This week, the market will focus on a series of high-impact events, especially the US monthly employment report (November 1) and the earnings releases of several technology giants, including Amazon; Apple; and Microsoft. These important events will reveal the health of the US economy and may provide signals for the Fed's future policies. With the presidential election on November 5 approaching, the market expects that if Trump returns to power, he may once again promote tax cuts and tariffs, which may become a catalyst for a new round of inflation. Investors need to pay close attention to the direction of the market after the election and be cautious in dealing with potential market fluctuations and geopolitical uncertainties. The market may experience uncertainty and potential social risks in the next two to three months, and investors need to be prepared for the possibility of increased negative market sentiment.

Stock market: US stocks are under pressure in the short term, and financial report risks in the European market are yet to be released

Although the S&P 500 index did not fall significantly last week, the overall market sentiment is still cautious due to the increase in borrowing costs. Many traders are conservative about future trends, and some analysts have even lowered their expectations for year-end gains. Especially in Europe, France's Remy Cointreau Group and Italy's energy giant Eni Group have both lowered their full-year performance guidance, highlighting the impact of economic downward pressure on various industries.

In addition, due to the recent strong performance of the US dollar, the yields of US companies denominated in foreign currencies have decreased, and global liquidity has also been affected. The yield on the UK's 10-year government bond hit 4.212% on Friday, mainly because the market expected that the budget to be released by the finance minister might relax debt restrictions, which would increase the financial burden on the UK. The pound fell 3% to 1.297 against the US dollar. Driven by global risk aversion, this trend is expected to continue in the short term.

Gold and foreign exchange market: safe-haven buying supports gold prices, and the US dollar index is strong

Gold attracted safe-haven buying again last week, and the price once climbed to a record high of $2,758.50. As market concerns about economic downturn remain, the attractiveness of gold as a traditional safe-haven asset has increased. Gold prices may remain high and volatile in the short term. Investors are advised to buy on dips, but be wary of the potential volatility of the upcoming employment data on the US dollar.

In terms of the US dollar, the US dollar index, which measures the US dollar against major currencies, hovered around the 104 mark last week and hit a three-month high of 104.57 last Wednesday. This trend was mainly boosted by the unexpectedly strong US economic data, and the market gradually reduced expectations for the Federal Reserve to cut interest rates quickly. The US interest rate cut reached 50 basis points in September, but traders generally predicted that the rate cut next month may be reduced to 25 basis points as the Federal Reserve is cautious about adjusting its policy too quickly.

The euro fell below 1.08 against the dollar, a significant decline from 1.12 a month ago, while the yen remained around 152.00 against the dollar. Japanese government officials issued a warning and made it clear that they would crack down on speculators' short-selling behavior. After the results of Japan's parliamentary elections this week, if the ruling party loses its majority, it may exacerbate the weakness of the yen and Japanese stocks, which is worthy of attention in the foreign exchange market. Entering the weekend, the pound recovered some lost ground, and the cautious and optimistic market sentiment also found some demand for the risk-sensitive pound. Despite the tough policy outlook of the Reserve Bank of Australia, the Australian dollar still fell. Pay attention to the gains and losses of the 0.66 mark this week. Traders will pay close attention to the geopolitical risks in the Middle East and the uncertainty of the US presidential election on November 5.

Oil market: The situation in the Middle East may drive oil prices to rebound

Last week, the oil market gradually stabilized after two days of decline. Brent crude oil futures closed at $74.66 per barrel on Friday, while WTI crude oil was above $71.50. Since last week, supply risks brought about by changes in the situation in the Middle East have exacerbated market concerns. Although oil prices have retreated, the geopolitical situation in the Middle East still provides support for oil prices. If the situation escalates further, it is expected to have a negative impact on the supply chain, which in turn pushes up oil prices. Personally, I suggest that oil prices still have room to rise in the coming week, especially due to the risk appetite formed by the changes in the situation in the Middle East.