According to Woofun AI, the US financial market showed a typical “equity and remittance” differentiation pattern on November 3. Among them, US 10-year Treasury yields rose at the same time as the US dollar index (DXY), while international gold prices were under downward pressure.
The core driving force behind this market dynamic is not a single factor; it is a combination of better-than-expected macroeconomic data, political uncertainty brought about by the midterm elections, and uncertain prospects for geopolitical negotiations. Although the fall in international oil prices has temporarily allayed some concerns about inflation, market anxiety about the Federal Reserve's monetary policy path has not subsided; on the contrary, it has further intensified due to the emergence of economic resilience.
This complex macroeconomic environment has caused capital to fluctuate sharply between safe-haven assets and risky assets, forming a unique market structure where upward pressure on interest rates coexists with the strengthening of the US dollar.
Judging from macroeconomic fundamentals, strong data performance directly reshaped the market's expectations for a shift in the Fed's policy. According to JOLTS job vacancy data released by the US Department of Labor, the number of new jobs reached 7.523 million, an increase of 333,000 over the previous month. This figure was significantly higher than the 7.1 million expected by the market, showing the continued popularity of the labor market.
Meanwhile, factory orders increased by 1.8% in September, which also surpassed market expectations of 1.2%. The higher-than-expected performance of these key indicators sent a signal to the market that the US economy is not cooling down as rapidly as some pessimistic predictions, thus reinforcing the judgment that the Federal Reserve may need to maintain its austerity policy for a longer period of time.
According to data compiled by Woofun AI, based on the monitoring results of the CME (CME.US) FedWatch tool, the market currently anticipates that the probability that the Fed will raise interest rates in December is about 79%. This high probability expectation directly drives up bond yields. Within the bond market, the US 10-year Treasury interest rate rose 0.054 percentage points from the previous day to close at 4.966%.
It is worth noting that the interest rate once fell back to around 4.90% in the intraday period, but rebounded again in the afternoon as economic data was digested, showing the strength of the bulls. Furthermore, the US Treasury announced a reduction in the fourth quarter loan size of 10 billion US dollars to 618 billion US dollars. This supply-side adjustment also affected the balance between supply and demand in the short-term bond market to a certain extent.
In terms of the foreign exchange market, the strengthening of the US dollar index (DXY) reflects global capital's preference for dollar assets. The US dollar index (DXY) rose 0.033 points from the previous day to 101.527. Although the index measuring the value of the US dollar compared to the six major currencies fluctuated during the intraday period, it once again established a strong position after the US economic data was released. Specifically, in terms of bilateral exchange rates, the euro rose 0.07% against the US dollar to $1.1193; the yen fell 0.47% to 158.66 yen per dollar.
Despite the Bank of Australia raising the benchmark interest rate, the Australian dollar fell 0.4% and traded at $0.6968 per Australian dollar, indicating that non-US currencies are generally under pressure. The exchange rate of the US dollar to the won fell 1.08 won from the previous day to 1344.82 won per dollar. The intraday exchange rate once fell to around 1,338 won, but then rebounded. The complexity of the Korean won trend is that the decline in international oil prices has supported its performance to a certain extent. The price of Brent crude oil fell to about 105 US dollars per barrel, reducing the pressure brought about by energy imports.
However, the withdrawal of foreign investors from the stock market and uncertainty about AI investment returns limited the room for further appreciation of the won. MonexUSA's chief trading director Juan Perez pointed out that differences in policy expectations within the Federal Reserve and potential political conflicts mean that the dollar may face depreciation pressure in the long run. The impact of political factors on the bond and foreign exchange markets cannot be ignored. There are opinions that if the Democratic Party controls Congress in the midterm elections, Trump's expansionary fiscal policy may be limited, and this change in policy expectations is subtly affecting market pricing.
The precious metals market has become the main source of pressure in this round of macro-fluctuations. The international gold price fell by $22.30 from the previous day to $3924.13 per ounce. At one point, it fell to around $3893 in the intraday period, then rebounded to around $3,960, but failed to maintain the upward trend. Gold futures due in December on the New York Mercantile Exchange also fell 0.7% to close at $3940.40 an ounce. Philip Strible, chief market strategist at BlueLineFutures, analyzed that rising interest rates on the US dollar and treasury bonds are suppressing the price of gold. Since gold is an asset that does not generate interest, when bond yields rise, its relative investment appeal decreases.
Forex.com market analyst Fawad Razakzada believes that if the Democratic Party controls the Senate and House of Representatives at the same time, the possibility of a policy impasse will increase, leading to a weakening of the US dollar, and this is expected to be a factor supporting the price of gold. The market generally believes that the midterm election results and US employment data will be key factors in determining future interest rates and US dollar trends. In particular, the US employment report, which is expected to be released on the 6th, may affect the Federal Reserve's monetary policy decision in December, leading to continued fluctuations in the bond, foreign exchange, and precious metals markets.