Bank of America reserves fall below $3 trillion, Dallas Fed chairman calls for caution rate cuts, gold prices fall from record highs

Basic news

On Friday (October 3, Beijing time), spot gold trading was around $3,855.30/ounce, and gold prices hit a new record high again on Thursday to $3,896.60/ounce, but gold prices eventually closed lower as Dallas Fed Chairman Logan called for caution against further interest rate cuts; U.S. crude oil trading was around $60.68/barrel, and oil prices fell nearly 2% on Thursday, hitting a four-month low, lowering for the fourth consecutive trading day as the market was concerned about oversupply before the OPEC+ weekend meeting.

Focus on this day

Reminder: Due to the suspension of the US government, several key economic data from the US Bureau of Economic Analysis (BEA), Bureau of Labor Statistics (BLS), Census Bureau and the US Department of Agriculture may be postponed, including but not limited to: non-farm employment reports, US GDP data, CPI reports and agricultural reports, etc., and the actual situation shall prevail.

Stock Market

The three major U.S. stock indexes closed slightly higher on Thursday, setting a record closing high, mainly thanks to the support of the technology sector. At the same time, investors were cautiously paying attention to private labor market data the second day after the US government shutdown.

The S&P 500 index rose slightly, and its valuation has reached its highest level since 2020; the Nasdaq index outperformed, up 0.4%, mainly supported by technology giants including Nvidia, Apple and Broadcom, the leading artificial intelligence chip www.xmtraders.companies.

In view of the shutdown of the U.S. government and the lack of official data, investors are paying attention to information from other sources. According to Challenge, a global reemployment www.xmtraders.companyThe latest report from rGray & Christmas said the number of layoffs announced by U.S. employers in September has decreased, but the recruitment plans so far this year are the lowest since 2009. The ADP National Employment Report the day before was weaker than expected.

Plante Moran Financial Advisors chief investment officer Jim Baird said: "The market is looking at all in the context of weak employment data in recent months, trying to judge the true direction of the labor market in the future."

The lack of employment data so far has prompted traders to bet that the Fed will cut interest rates twice this year, including one at the end of October. However, due to the government shutdown, the Ministry of Labor had to postpone the release of the September non-agricultural employment report. Baird said that while the government shutdown is not shocking and investors are relieved to know that the past government shutdowns usually don’t hurt the market, it is still worrying.

He said: Given the current polarization of the two parties and the two sides seem to be sticking to their respective positions, it is not surprising that this shutdown will take longer.

The Dow Jones Industrial Average rose 0.17% to 46,519.72 points. The S&P 500 rose 0.06% to 6715.35 points; the Nasdaq rose 0.39% to 22844.05 points. The S&P Index and the Dow have set record closing highs for two consecutive days, with the Nasdaq being just a short distance from a record Wednesday. Earlier, the S&P and Nasdaq hit record highs. The forward P/E ratio of the S&P index climbed to 23.1.

The technology sector closed up 0.5%, bringing the biggest boost to the S&P index, and chip stocks contributed indestructible. The broader semiconductor index closed up 1.9%, also setting a record closing high.

Of the 11 major industry sectors of the S&P 500, the materials sector rose the most, climbing 1%. The energy sector saw the biggest decline, down 1%. Although the non-essential consumer goods sector did not fall the most, it caused the biggest drag on the S&P 500, mainly due to Tesla's closing down 5%, the largest single-day decline since late July. The electric car maker gave up on earlier gains after a strong quarterly delivery report, but some analysts pointed to risk in its electric vehicle sales in the www.xmtraders.coming quarters due to the cancellation of the $7,500 federal tax credit. Gold prices fell nearly 1% on Thursday, falling from a record high set intraday after Dallas Fed Chairman Logan called for caution on further rate cuts.

Spot gold fell 0.5% to $3,845.78 per ounce. The U.S. December gold futures settlement price fell 0.8% to $3,868.1 per ounce.

Logan said that the Federal Reserve's interest rate cut last month was an "insurance" measure to prevent the sudden deterioration of the employment market conditions, but further interest rate cuts still need to be "cautious" in the future.

RJO Futures Market Strategist BobHaberkorn said gold prices fell after Logan's speech. While the remarks of a Fed official may not necessarily determine the policy tone of the Fed as a whole, it adds a hint of caution to the market's expectations that the Fed will cut interest rates aggressively at its next meeting.

Traders currently expect the possibility of further rate cuts by the Federal Reserve in October meeting at 99%. Gold, as a safe-haven asset in uncertain times, has performed well in a low-interest rate environment, up 47% so far this year. Spot gold once hit a record high of $3,896.49 during the session, and the US government shutdown entered the second day.

The government shutdown could lead to delayed release of key economic data, including the highly-watched non-farm employment report originally scheduled to be released on Friday. The weekly initial unemployment claims report, originally scheduled to be released on Thursday, also failed to be released, which is an important indicator of the health of the labor market.

Goldman Sachs said in a report on Wednesday that gold remains the bank's most confident long-term product recommendation, and said that upside risks are intensifying for its forecast of gold price of $4,000 per ounce in mid-2026 and $4,300 per ounce in December 2026.

In other precious metals, spot silver fell 1.4% to $46.67 per ounce; platinum remained stable at $1558.55 per ounce; palladium fell 1% to $1231.94 per ounce. Oil market

Oil market

Oil prices fell about 2% on Thursday, hitting a four-month low, lowering for the fourth consecutive trading day as the market was concerned about oversupply before the OPEC+ weekend meeting.

The settlement price of Brent crude oil futures fell 1.9% to $64.11 a barrel, the lowest since June 2. U.S. crude oil futures settlement price fell 2.1% to $60.48 a barrel, the lowest since May 30.

Three people familiar with the matter said that OPEC+ may increase production by as much as 500,000 barrels per day in November, three times the increase in October, and Saudi Arabia is seeking to regain market share. Jorge Montepeque, managing director of Onyx Capital Group, pointed out that some banks, including Macquarie, predict a "super supply surplus" in the oil market, putting pressure on market sentiment.

Investment research firm HFIResearch wrote in a blog: "Ominous signs have emerged. U.S. crude oil inventories will increase by the end of the year, and global visible inventories will also rise. Coupled with the increase in OPEC+ crude oil exports, the oil market will eventually continue to be weaker."

The U.S. Energy Information Administration (EIA) said on Wednesday that U.S. crude oil, gasoline and distillate inventories increased last week as refining activity and demand slowed.

PVMEnergy analysts pointed out signs of weak demand have exacerbated concerns about oversupply. They noted that “oil demand forecasts vary greatly, but on average, 150,000 barrels per day lower than the forecast from January to September this year.”

The G7 Finance Minister said on Wednesday that measures will be takenIncrease pressure on Russia and impose sanctions on countries that continue to increase Russian oil procurement.

According to two officials, the United States will provide Ukraine with intelligence for long-range missiles to strike Russia's energy infrastructure to assist Ukraine in www.xmtraders.combating refineries, pipelines and other facilities, aiming to cut off the Kremlin's revenue stream.

UBS www.xmtraders.commodity analyst Giovanni Staunovo said market concerns about possible disruption in Russia's crude oil supply has heated up again, but as long as the actual supply is not affected, the impact on oil prices will be limited. Traders said that as the world's largest crude oil importer, China's strategic reserve demand has also supported oil prices to a certain extent and limited the decline.

Forex Market

The dollar rose against the euro and yen on Thursday, with the dollar rebounding against the yen after four consecutive days of declines, and traders assessed the impact of the U.S. government shutdown. The shutdown has resulted in a lack of government data, including a highly-watched September employment report that was supposed to be released on Friday.

However, Marc Chandler, chief market strategist at Bannockburn GlobalForex, said that the gap may not be as bad as people fear as they fear. "I don't think neither the market nor the Fed are moving forward in the dark," he said.

A report by the Chicago Fed on Thursday www.xmtraders.combined private data and existing public data, and estimated the unemployment rate in September was 4.3%, the same as in August, indicating that people's concerns about the rapid rise in unemployment has not yet begun. However, details of the report, along with other data, suggest that the labor market continues to be down.

The US dollar fell on Wednesday after the ADP National Employment Report showed that private jobs fell by 32,000 in September, boosting expectations that the Federal Reserve will cut interest rates twice this year. But the dollar pulled back Thursday. Chandler said: "Many people think that the dollar will be sold as the government shuts down. I think they are betting in the wrong direction and are now forced to close their positions."

The dollar index rose 0.13% to 97.86. The euro fell 0.09% against the dollar to $1.1719.

According to CME's FedWatch tool, traders believe that the Fed's 25 basis points cut at its October meeting was almost certain, and believe that the probability of another rate cut in December is 90%.

Dallas Fed Chairman Logan said the Fed cut interest rates in September was to prevent the risk of sharp deterioration in the job market, and the move was appropriate. But she pointed out that the current cooling of the labor market is still moderate, suggesting that she is not in a hurry to cut further interest rates. The dollar rose 0.08% against the yen to 147.17 yen.

Traders are watching this weekend's election for president of Japan's ruling party to find clues about how fiscal policy will affect the yen.

The pound fell 0.25% against the dollar to $1.3443. Traders have begun evaluating the UK's November budget for the economy andThe impact of pound.

International News

Ukrainian Foreign Minister: Calling on the International Atomic Energy Agency to intervene in the external power outage of the Zaporo thermonuclear power plant

On October 2 local time, Ukrainian Foreign Minister Sebiga issued a statement through social media, pointing out that Russia has deliberately disconnected the Zaporo thermonuclear power plant from the Ukrainian power grid and is planning to connect the nuclear power plant to the Russian energy system. Sebiga said: "Russia deliberately cut off the power supply of the Zaporo Thermal Power Plant. This power outage is a test-related behavior of manual operation. The core purpose is to pave the way for the subsequent connection of the occupied Zaporo Thermal Power Plant to the Russian power grid." Sebiga said that he was strongly concerned about the possible actions Russia may take next and believed that the relevant actions would be at higher risk. Sebiga called on the International Atomic Energy Agency to take all necessary measures quickly to ensure that the maintenance team can enter the Zaporo Hepto Nuclear Power Plant without hindrance, and to assist in obtaining professional repair equipment, so as to immediately start the restoration of the remaining spare lines, and then restore multiple independent external power connections to reduce nuclear safety hazards as soon as possible.

The U.S. Department of Energy announced the termination of nearly $8 billion new energy projects

The U.S. Department of Energy announced the termination of 223 energy projects on the 2nd, with a total of approximately $7.56 billion in related funds. These projects mainly involve clean energy and renewable energy, and states that won the Democratic Party last year will be generally hit. The U.S. Department of Energy said in a press release that from the perspectives of economic benefits, national security and energy security, the terminated projects failed to meet the standards for the federal government to continue to invest. The recipient of the project fund can file a www.xmtraders.complaint within 30 days. Russell Watt, director of the White House Office of Management and Budget, posted a preview on social media on the evening of the 1st: "The nearly 8 billion US dollars of 'green new scam' funds used to promote the left-wing climate agenda were cancelled."

The reserves of the US banking system fell further after falling below the $3 trillion mark

The reserves of the US banking system fell for the eighth consecutive week, and are still further downward after falling below the $3 trillion mark. This indicator is an important consideration when the Federal Reserve decides to continue to reduce its balance sheet. Data released by the Federal Reserve on Thursday showed that bank reserves fell about $20.1 billion to $2.98 trillion in the week ending October 1, the lowest since January. The reserves fell amid the U.S. Treasury Department increased its bond issuance efforts to rebuild its cash balance after its debt ceiling was raised in July. This took away liquidity from other liabilities on the Fed's account, such as central bank overnight reverse repurchase agreement tools and bank reserves.

Trump pressures European energy to "de-Russia" Kiev offers suggestions to fill the gap with the U.S. oil pipeline through Ukraine

It is reported that as US President Trump urges Europe to get rid of its dependence on Moscow energy to end the Russian-Ukraine conflict, Kiev has proposed a plan to Washington, planning to assist the United States in replacing Russia's oil supply to Europe. Ukrainian Energy Minister Svetrana Glenchuk said it was buried in Ukrainian territoryOil pipelines deep in the soil can transport two sources of oil: oil mined in the country under the U.S.-U.S. mineral agreement, or crude oil arrived from the United States. This potential cooperation means that U.S. oil www.xmtraders.companies will replace Moscow's position in the European energy market. “Ukraine’s oil and gas infrastructure has always been a key link in Europe’s energy security, because Ukrainian territory was once the channel for Russia to deliver energy to Europe, and we have extremely well-established oil and gas infrastructure,” Glenchuk said.

www.xmtraders.comN: The White House will announce its layoffs as early as Friday

Two White House officials revealed that the White House has drawn up a list of federal agencies, planning to implement recent dismissals on these agencies, and the relevant news may be announced as early as Friday local time. "We may announce layoff plans tomorrow, Saturday or Sunday," one of the officials said. The Trump administration is still finalizing some of the firing details, but the list is mainly formulated by the Office of Management and Budget, in conjunction with the targeted agencies. Officials said some agencies were targeted because of their DEI policies, but mainly because the government believes that the direction of these agencies' work does not match the president's priority agenda.

Argentine bonds staged a roller coaster. The United States reiterated its support but stressed that it would not directly invest money

U.S. Treasury Secretary Scott Becent reiterated his support for Argentina on Thursday, but later warned that any aid would not include U.S. direct investment, triggering sharp fluctuations in Argentina's bond prices. The foreign exchange market is relatively stable, mainly because the Javier Mile government sells the dollar for the third consecutive day in defending the peso. Becent said on X earlier Thursday that the United States will "take the necessary measures" to help Argentina and drive its bond surge. Shortly afterwards, he told www.xmtraders.comBC that this did not mean to invest money in the country, and that this supplement brought the bonds back. Afterwards, there were reports that senior officials of the Milei administration would go to Washington for consultations, and the bonds rose again.

Putin: If the Russian supply is lost, the oil price will immediately exceed $100 per barrel

Russian President Vladimir Putin said at the Valdei International Debate Club meeting in Sochi that if the global market loses Russian crude oil supply, the oil price will "spick" and will immediately exceed $100 per barrel. "It is impossible to imagine that the global energy industry and the global economy can remain normal in the absence of Russian oil. That is simply impossible." Putin said, "Is this really in the interests of countries with already bad economic conditions - including European countries?"

Report: Trump considers providing at least $10 billion in bailouts to American farmers

According to people familiar with the matter, Trump is considering providing $10 billion or more aid to American farmers. The funds are said to be distributed in the www.xmtraders.coming months. A senior government official said the focus of the discussion was $10 billion to $14 billion in aid. The aid could be used to help U.S. soybean producers and other areas of the agricultural economy.

Zelensky says he is expected to gain more distanceCheng Weapon Putin warns that the "tomahawk" supply to Ukraine will trigger escalation

Ukrainian President Volodimir Zelensky said on Thursday that Ukraine may be able to obtain more long-range weapons from the United States to deal with the increasingly deadly Russian air strikes. Putin warned late Thursday that supplying the Tomahawk missile to Ukraine would "mean that Russia-US relations have entered a new phase of escalation." Russia will respond "appropriately" to this, although these missiles will not change the situation on the battlefield, he told foreign policy experts at the annual meeting of the Sochivaldian Debate Club.

Domestic News

Traffic passenger flow remained at high level on the second day of the National Day and Mid-Autumn Festival holiday

October 2 is the second day of the National Day and Mid-Autumn Festival holiday. The pressure on road networks such as railways and air transportation continues to rise, and traffic passenger flow remains at high level. Today, it is estimated that the cross-regional flow of people in the whole society will be nearly 290 million, an increase of 2.2% year-on-year. The national railway is expected to send 19.3 million passengers, and 1,409 passenger trains are planned to be added. The total flow of expressways in the country is expected to be 61.2 million vehicles, and the traffic flow of expressways and national and provincial roads in key urban agglomerations such as the Beijing-Tianjin-Hebei, the Yangtze River Delta, the Guangdong-Hong Kong-Macao Greater Bay Area, and Chengdu-Chongqing is high. National waterways are expected to send 1.68 million passengers today, an increase of 20.52% over the same period last year.

The Gobi lit up the "Energy Twin Towers" in my country's solar thermal power generation moves towards a "supporting power supply"

Today (2nd), the world's first "two towers and one machine" solar thermal energy storage power station located in Guazhou, Jiuquan, Gansu. The two heat absorption towers were lit up at the same time and successfully entered the trial operation of the entire system, marking that the tower-type solar thermal power generation technology has broken through the traditional paradigm of "single tower single machine". As my country's new energy system construction gradually accelerates, the proportion of new energy is increasing. Due to its own long-term energy storage, the value of solar thermal power generation is becoming increasingly prominent, and it is gradually shifting from "supplementary power supply" to "supporting power supply".

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