Bank of England's interest rate resolution is in fog, analysis of short-term trends of spot gold, silver, crude oil and foreign exchange on September 8

Global Market Review

1. European and American market trends

The three major U.S. stock index futures rose, Dow futures rose 0.17%, S&P 500 futures rose 0.22%, and Nasdaq futures rose 0.36%. The German DAX index rose 0.50%, the UK FTSE 100 index rose 0.04%, the French CAC40 index rose 0.46%, and the European Stoke 50 index rose 0.47%.

2. Interpretation of market news

The Bank of England interest rate resolution is in a fog: a trading psychological game in the stalemate of data

⑴ Recently, many institutions have adjusted their expectations for the Bank of England (BOE) interest rate trend, reflecting the market's concerns about the continued stalemate of inflation data. HSBC has postponed its previously forecasted rate cuts from August 2024 to April 2026, and expects the benchmark interest rate to gradually drop from its current 4% to 3.00% in February 2027. ⑵Deutsche Bank also postponed the Bank of England's next rate cut from November to December. The agency believes that the Bank of England's Monetary Policy xmaccount.committee decided to keep interest rates unchanged with a slight vote of 5-4 in its August meeting, revealing internal differences, and the president himself may be more inclined to wait until the end of the year. ⑶ The inflation data recently released by the UK are particularly eye-catching. The inflation rate in July reached its highest point in 18 months, growing the fastest among the world's major developed economies. This stubborn inflationary pressure, xmaccount.combined with a mixed signal from the Bank of England, is aggravating market uncertainty and keeping investors cautious. ⑷ Traders generally expect there will be no changes in the Bank of England's next policy meeting on September 18, LSEG data shows that the market's expected probability of the holding interest rate remains unchanged is as high as 96.75%. However, the fall budget time (November 26) increases the likelihood of a December rate cut unless labor market data is significantly weaker.

Norway holds a new parliamentary election, no political party is expected to form a separate cabinet

Norway holds a new parliamentary election on the 8th. Voters vote in 19 constituencies across the country, and 169 parliamentarians were elected from 4,912 candidates from 22 political parties or organizations. The voting for this election was held from 9:00 to 21:00 local time on the 8th, and some regions also began voting on the 7th. Staff told reporters that in addition to voting on voting days, voters can also xmaccount.complete voting at some polling stations that are open in advance from early July to September 5. The preliminary results will be announced as early as the evening of the 8th local time. Data from the Norwegian Bureau of Statistics showed that the number of voters qualified for voting reached 4.05 million, a record high.

European natural gas prices rose, supply concerns became the focus

European natural gas prices rose due to supply concerns, with the benchmark Dutch TTF contract rising 2.3% in midday trading to €32.74 per megawatt-hour. Market observers say the possibility of further sanctions on Russia is increasing after Moscow launched the largest air strike since the outbreak of the conflict in Kiev. Meanwhile, EU Energy xmaccount.commissioner Jorgensen said last week that the EU should not import Russian energy even if Russia reaches a peace agreement with Ukraine. "Traders are preparing for news of a ban on Russian gas in Europe," said ANZ analysts. "At the same time, there are concerns that a colder winter than usual may boost demand for liquefied natural gas in North Asia, thereby increasing xmaccount.competition for goods." According to ANZ, imports in the region rose 9% year-on-year in August.

Seasonal upwelling in the Bay of Panama has disappeared for the first time in 40 years

A new study released by the Smithsonian Institution Tropical Research Institute in the United States shows that in 2025, the Panama Bay waters did not experience seasonal upwelling for the first time in 40 years. The upwelling in the Panama Bay waters generally occurs from January to April each year, and the nutrient-rich sea water is continuously brought to the sea through trade winds. Upwelling refers to the process of nutrient-rich colder seawater in the deep ocean rising to the sea surface; while trade winds are winds blowing from subtropical high-pressure zones to the equatorial low-pressure zones at low altitudes. Upstreams support high-yield fisheries and help protect coral reefs from heat stress.

BlackRock survey shows that 24% of pension plans are considering adding alternative assets

BlackRock said that 24% of pension plans are considering adding alternative assets in the next year; a portion of the trillion-dollar funds in such accounts may be expected to flow into private equity, credit and other assets. According to a survey released by BlackRock on Monday, the interviewed pension plan said the default target day fund products are most likely to include alternative assets while investing in stocks and bonds. Pension plans considering adding alternative assetsOf the cases, 30% said it would add an independent private equity fund to the investment options of pension depositors.

Goldman Sachs expects oil market surplus to increase slightly in 2026

Goldman Sachs expects oil market surplus to increase slightly next year due to increased production in the Americas. Goldman Sachs predicts that the oil oversupply in 2026 will increase from the previously estimated 1.7 million barrels per day to 1.9 million barrels per day, mainly from Brazil, Canada and Guyana. Global oil demand is expected to increase by 900,000 barrels per day next year. Goldman Sachs expects that by 2026, the average price of Brent crude oil and WTI crude oil will reach $56 and $52 per barrel, respectively.

New trends in Brazil's economy: inflation expectations are stable, growth prospects are fine-tuned

⑴ Survey of the Brazilian Central Bank shows that economists' forecast for the full-year inflation rate in 2025 is stable at 4.85%, and at the same time, the inflation forecast for 2026 is fine-tuned from 4.31% to 4.30%, indicating that inflation pressure has been controlled to a certain extent. ⑵ The market's expectations for the direction of interest rates have also remained unchanged. It is expected that the SELIC interest rate will remain at 15.00% by the end of 2025 and 12.50% by the end of 2026, which may provide the market with certain policy certainty. ⑶ In terms of economic growth expectations, Brazil's GDP growth forecast in 2025 was slightly lowered from 2.19% to 2.16%, and from 1.87% to 1.85% in 2026. The slight adjustment of growth momentum may require investors to pay close attention. ⑷ The exchange rate forecast of Brazilian real to the US dollar also shows certain stability, and is expected to remain at 5.55 real to 1 US dollar by the end of 2025 and 5.60 real to 1 US dollar by the end of 2026, which implies that the exchange rate fluctuation may be relatively limited.

The yen fell to a multi-month low: market psychology under internal and external troubles

⑴ The Japanese Prime Minister announced his resignation over the weekend, which triggered market concerns about the country's political stability. This uncertainty was quickly reflected in the foreign exchange market, causing the yen to fall to a nearly one-and-a-half low against the euro and Swiss franc during Monday's Asian trading session, to a nearly one-and-a-half low against the pound and a four-day low against the dollar. ⑵ Despite the intensification of political turmoil, Japan's economic data unexpectedly showed resilience. The GDP grew by 0.5% quarter-on-quarter in the second quarter, exceeding the previous expectations of 0.3%. In addition, the annual growth of bank loans in August was 3.6%, which was also higher than market forecasts, indicating that some economic indicators remained stable. ⑶ From external factors, the U.S. employment data is weaker than expected, and the market bets on the probability of the Federal Reserve's interest rate cut in September are as high as 90%, which should have been beneficial to non-U.S. currencies. However, the yen did not gain enough support from the weakness of the dollar and continued to weaken, reflecting that the market valued its internal political risks more. ⑷ The yen trend is in a contradictory situation, domestic political uncertainty overshadows some of the positives of economic data, and external weakness in the dollar has not provided an effective boost. This shows that, at presentIn a xmaccount.complex market environment, the influence of geopolitical risks on currency trends sometimes exceeds economic fundamentals, making trading psychology more cautious.

The political situation in France is turbulent, and the yield on ten-year bonds has quietly risen

⑴ The yield on the 10-year bonds of France is currently at 3.44%, 79 basis points higher than the yield on the same period of Germany's treasury bonds. The spread has expanded by about 10 basis points since the French Prime Minister announced a vote of distrust on August 25, showing that market concerns about France's political stability are gradually emerging. ⑵ Although France's debt crisis is not about to collapse, it is slowly fermenting. The Prime Minister seeks a vote of confidence to push for a budget to cut deficits. If it fails, France may face deeper political uncertainty. President Macron needs to find a new prime minister or hold a general election ahead of schedule, which will pose greater challenges to the already under pressure fiscal situation. ⑶ It is worth noting that in the context of the limited attractiveness of US bonds, investors' demand for French Treasury bonds remains. Even with political risks, the premium of French government bonds xmaccount.compared to German government bonds has not expanded significantly, indicating that in the absence of sufficient alternative options, some funds still regard France as a safe haven, but the persistence of this "calm" will be subject to the 2027 election and the rising interest rate environment.

The Bank of Canada's interest rate cut expectations heated up, and Canadian futures quietly rose

⑴ Canada's employment data unexpectedly shrank by 65,500 people in August, causing the unemployment rate to climb to 7.1%, the highest level since May 2016 (excluding the impact of the epidemic). This data significantly boosted the market's expectations that the Bank of Canada will launch a rate cut on September 17. Currently, the money market shows that the country's central bank is as likely to resume loose policies. ⑵ Market traders' sentiment was affected by employment data, and Canadian stock futures S&P/TSX index futures rose 0.23% to 1,724.30 points. Last Friday, the benchmark index closed higher for the eighth consecutive trading day, setting a new record. ⑶ Affected by this, in addition to the Bank of Canada, traders also expect the U.S. Federal Reserve to announce a rate cut on the same day (September 17). The previously released U.S. non-farm employment report also showed signs of deterioration in the labor market. ⑷ In terms of xmaccount.commodities, gold prices hit record highs on Monday, while oil and copper prices also showed a slight upward trend. ⑸ It is worth noting that changes in investors' expectations of interest rate hikes and interest rate cuts often affect market sentiment and trading decisions, which has been confirmed in recent economic data in Canada and the United States.

3. Trends of major currency pairs in the New York Stock Exchange before the New York Stock Exchange

Euro/USD: As of 20:23 Beijing time, the euro/USD rose, now at 1.1730, an increase of 0.10%. Before the New York Stock Exchange, affected by the stable selling resistance at 1.1730, (Euro/USD) fell on the last trading day, and entered a profit-taking wave after the previous rise, trying to get rid of the obvious overbought state of (RSI) and start to push negatively.

GBP/USD: As of 20:23 Beijing time, GBP/USD is up and is now at 1.3533, up 0.20%. Before the New York market, the (GBPUSD) price fell in the last intraday trading, trying to unload this overbought condition on (RSI), as negative signals emerge, trying to obtain bullish momentum that may help it recover and rise again, as positive pressure from trading above EMA50 continues, representing dynamic support for increasing short-term price recovery opportunities and is dominated by the main bullish trend on a short-term basis and its trading along supportive slashes.

Spot gold: As of 20:23 Beijing time, spot gold rose, now at 3616.77, up 0.82%. Before the New York Stock Exchange, the price of (gold) fell in the fluctuations of the last trading day, and was previously under pressure to rise after the last bull market. In addition, it also tried to get rid of the obvious overbought state of (RSI) and began to show negative overlap signals, increasing price pressure.

Spot silver: As of 20:23 Beijing time, spot silver rose and is now at 41.199, up 0.60%. Before the New York Stock Exchange, the price of (silver) fell on the last trading day due to negative signals on (RSI), which had previously reached overbought levels, trying to find an upward low as the basis for gaining bullish momentum required for recovery and rise. The main bullish trend dominated and trading along a small slash in the trading above the EMA50 increased the opportunity for the price to recover on the near-term basis.

Crude Oil Market: As of 20:23 Beijing time, U.S. oil rose to 63.230, up 2.23%. Before the New York Stock Exchange, the price of (crude oil) soared on the last trading day, was supported by the key support of $61.60, and was strengthened by its rebound, providing a clear bullish momentum. This intraday recovery is accompanied by the emergence of positive overlapping signals on (RSI), increasing the possibility of extending a short-term rebound.

4. Institutional View

Deutsche Bank: The Bank of England will wait until December to cut interest rates

Deutsche Bank analyst Sanjay Raja wrote that the Bank of England may not cut interest rates until the end of the year. The Bank of England last monthCut the benchmark interest rate to 4.00%, but it implies that it remains cautious about inflation. Raja said that as a significant proportion of the Bank of England governing xmaccount.committee tend to suspend, central bank governor Bailey is likely to be inclined to do so now. He pointed out that the UK government will release its budget in a relatively late November, which may lead to the Bank of England being more willing to wait until the fiscal situation becomes clearer before cutting interest rates. Raja said more data on the direction of the UK economy and inflation will also be released at the December meeting. "In short, central bank governors may be more inclined to wait until the end of the year to pull the trigger for another rate cut," he said. "Mitsubishi UF: EUR/USD may rebound above 1.20 by the end of the year.

Mitsubishi UFE analyst Hardman said that the euro may strengthen against the dollar, boosted by favorable monetary policy differences between the Federal Reserve and the European Central Bank. The Fed is expected to cut interest rates again on September 17. By contrast, the ECB implied a higher threshold for further rate cuts and may keep interest rates unchanged on Thursday, Hardman said. Mitsubishi UFE expects Europe and the United States to rebound from the current 1.1726 to above 1.2000 by the end of the year. "We expect the rise in French political uncertainty will not undermine the current upward trend of the euro and will not prompt the ECB to cut further interest rates at the current juncture," Hardman said.

The above content is all about "[XM Forex Official Website]: The Bank of England's interest rate resolution fog, analysis of short-term trends of spot gold, silver, crude oil, and foreign exchange on September 8". It was carefully xmaccount.compiled and edited by the editor of XM Forex. I hope it will be helpful to your trading! Thanks for the support!

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