On Wednesday (December 4th Beijing time), spot gold traded around 2641.51, as strong US employment data suggested that the Federal Reserve would adopt a cautious attitude towards interest rate cuts, while the weakening of the US dollar and the decline in government bond yields suppressed the decline, and the market is waiting for further economic clues; US crude oil traded at around $70 per barrel as Israel threatened to attack Lebanon if the ceasefire agreement with Hezbollah breaks down, and investors are also looking forward to OPEC+announcing an extension of production cuts this week.

The Dow Jones Industrial Average closed down 0.17% on Tuesday at 44705.53 points; The S&P 500 index rose 0.05% to 6049.88 points; The Nasdaq index rose 0.40% to 19480.91 points.

Key focus of the day: China's November Caixin Service PMI, UK's November SPGI Service PMI final value, US November ISM non manufacturing PMI, US November ADP employment changes, US October durable goods order monthly rate correction, US October factory order monthly rate, EIA data, Bank of England Governor Bailey's speech at an event held by the Financial Times, European Central Bank President Lagarde's introductory speech at a hearing of the European Parliament's Economic and Monetary Affairs Committee, and St. Louis Fed President Moussa Lem's speech.

equity market

The S&P 500 index and Nasdaq index hit new closing highs on Tuesday, as technology stocks continued their recent gains. Investors are waiting for more employment data, and the Dow Jones Industrial Average closed slightly lower. Market observers also digested the reassuring remarks of Federal Reserve decision-makers. Two decision-makers stated that they believe the inflation rate will drop to the Federal Reserve's 2% target and the job market will be "robust". They have not explicitly stated whether they will support another interest rate cut later this month. On Monday, Federal Reserve Governor Waller stated that he is "currently" inclined to support another rate cut this month.

Investors will closely monitor the US monthly employment report to be released on Friday. They will also pay attention to other data released this week, including November private salary data and the Service Industry Report from the Institute for Supply Management (ISM), "said Paul Nolte, senior wealth advisor and market strategist at Murphy&Sylvestst in Elmhurst, Illinois." The market is waiting for big data, which includes Friday's ISM and (employment) reports, so people are adopting a wait-and-see attitude

A report by Er shows that job vacancies in the United States steadily increased in October, while the number of layoffs hit the largest decline in a year and a half. According to the FedWatch tool of Zhishang Institute, the financial market expects a probability of about 72% for the Federal Reserve to cut interest rates by 25 basis points at its policy meeting on December 17-18.

Amazon's stock price has risen. The company announced a series of new artificial intelligence platforms, known as foundational models, at its annual AWS conference. Due to former US President Trump recapturing the White House in the November 5th election, his Republican Party swept through both houses of Congress, and the S&P 500 index rose 5.7% in November. As of now, the index has risen by about 27% this year.

LPL Financial's Chief Global Strategist Quincy Krosby said that this is a market that has performed exceptionally well. You hope it pauses for a moment, takes a breath, and waits for another catalyst to push it up. The stock prices of South Korean companies listed in the United States have fallen, and the iShares MSCI South Korea ETF has declined, but the decline has narrowed after South Korean President Yoon Suk yeol said he will take action to lift the martial law that was just implemented a few hours ago.

gold market

Gold prices narrowed their gains on Tuesday after strong US employment data hinted that the Federal Reserve would adopt a cautious attitude towards interest rate cuts, while the weakening of the US dollar and declining bond yields suppressed the decline, and the market is waiting for further economic clues.

Spot gold was reported at $2644.05 per ounce, up 0.2%. Prior to the release of employment data in the United States, gold prices had risen by 0.7% at one point. US futures closed up 0.4% at $2667.90. Daniel Ghali, commodity strategist at TD Securities, said, "The JOLTS data confirms our expectations for a rebound in the job market, easing concerns about a significant slowdown in the labor market ahead of Friday's non farm payroll report

A strong employment report may lead the Federal Reserve to take a cautious stance on interest rate cuts. Before the release of Friday's non farm payroll report, investors' focus will shift to the ADP employment report and Federal Reserve Chairman Powell's speech on Wednesday. Traders currently believe that there is a 74% chance of the Federal Reserve cutting interest rates by 25 basis points in December. The yield on 10-year government bonds fell to a low point in over a month, and the US dollar also fell by 0.3%, limiting the decline in gold prices.

JPMorgan forecasts that the gold price may rise to 3000 US dollars/ounce in 2025 due to the reduction of the foam degree of physical demand and futures positions, which will lay the foundation for further growth in 2025.

Spot silver rose 1.7% to $31.01 per ounce; Platinum rose 1% to $956; Palladium fell 0.9% to $973.

Oil market

Oil prices rose more than 2% on Tuesday as Israel threatened to attack Lebanon if the ceasefire agreement with Hezbollah breaks down, while investors are also looking forward to OPEC+announcing an extension of production cuts this week.

Brent crude oil futures saw the largest increase in two weeks, rising 2.5% to close at $73.62 per barrel. US crude oil futures also recorded the largest increase since November 18th, rising 2.7% to close at $69.94 per barrel. The Israeli army ignored the ceasefire agreement reached in Lebanon last week and continued to strike what they called Hezbollah fighters. Senior Lebanese officials urge Washington and Paris to pressure Israel to maintain a ceasefire. UBS analyst Giovanni Staunovo said that the ceasefire is at risk, making some oil traders more concerned about the tense situation in the Middle East.

Staunovo added that although the conflict in Lebanon did not lead to a disruption in oil supply, traders will closely monitor the future.

The tense situation between Iran and Israel over the past few months. The Organization of the Petroleum Exporting Countries and its allies may extend production cuts at the OPEC+meeting on Thursday, which also supports oil prices. Four sources from OPEC+told Reuters that the organization is likely to extend production cuts until the end of the first quarter of next year. Researchers and analysts say that the outlook for global oil demand remains weak, and as transportation fuel demand begins to decrease, crude oil imports from major Asian countries may peak as early as next year.

foreign exchange market

The US dollar index remained largely unchanged on Tuesday, with a slight drop to 106.33 on the same day. According to the Bureau of Statistics of the US Department of Labor, as of the last day of October, job vacancies measuring labor demand increased by 372000 to 7.744 million, and the US dollar subsequently reduced its decline. According to calculations by the London Stock Exchange Group (LSEG), the price of US federal funds rate futures shows a 70% chance of a 25 basis point rate cut this month and a 30% chance of suspending the cut, with little change compared to Monday evening. Federal Reserve officials stated on Tuesday that they still believe inflation is falling towards the 2% target and expressed support for further interest rate cuts in the future.

The EUR/USD rose slightly on Tuesday as the political turmoil in France prompted traders to seek hedging protection against further price fluctuations. Some market participants pointed out that this crisis may be nearing its end. Meanwhile, after South Korean President Yoon Suk yeol announced martial law in a late night televised speech, the exchange rate of the Korean won against the US dollar plummeted to its lowest point in over two years. But later on Tuesday, Yoon Seok yeol said he would take action to lift the martial law that had just been implemented a few hours ago, and the Korean won regained some lost territory. Yin Xiyue's martial law was unanimously rejected by 190 members of parliament, and his political party also urged him to lift the martial law.

On the other hand, although Federal Reserve officials did not provide clear guidance on Tuesday on what actions they plan to take at their policy meeting later this month, the US dollar briefly rose after data showed a slight increase in job vacancies and a decrease in layoffs in October. With the partial easing of political tensions in South Korea, investors have focused their attention on a major issue troubling the eurozone: French politics.

French Prime Minister Michel Barnier's budget proposal has faced strong opposition from various political forces, and he will face a vote of no confidence on Wednesday. Barnier's budget includes painful tax increases and spending cuts aimed at repairing the country's precarious finances.

Marc Chandler, Chief Market Strategist at Bannockburn Forex in New York, said: 'We are at the end of a crisis and will hold a vote of no confidence tomorrow. Once the vote is passed, they won't be able to hold elections until July next year. Therefore, they may appoint a prime minister and try again, or make Barnier a caretaker prime minister and pass some laws to make the government...'

The government will continue to govern until July

The hedging demand reflected by the volatility of euro options has reached its highest level since March 2023 this week, coupled with a series of weak data, political uncertainty in major economies in the eurozone, and the seemingly unstoppable US dollar, the euro may be in trouble. As the French government is on the brink of collapse due to budget deadlock, the euro fell 0.7% at the beginning of the month on Monday

Up 0.1% to $1.0507.

After South Korean President Yoon Suk yeol announced martial law, the Korean won fell to 1443.40 won against the US dollar, the lowest level since October 2022. After the lifting of martial law by Yoon Seok yeol, the Korean won fell 1% against the US dollar to 1418.35 Korean won. Yin Xiyue previously stated that in order to protect freedom and democracy, he had no choice but to take martial law measures and expressed opposition to the party

Hijacking parliamentary procedures has plunged the country into crisis.

The USD/JPY fell to 149.55, while the EUR/JPY remained unchanged at 157.12. Traders are increasingly convinced that Japan may raise interest rates this month, with the Korean won falling to its lowest level against the Japanese yen since May 2023, dropping 0.9% to 1052.

international news 

A large number of South Korean people gathered in front of the parliament to demand the withdrawal of emergency martial law

At around 22:00 local time on December 3rd, South Korean President Yoon Seok yeol suddenly conducted a live television broadcast and announced the implementation of emergency martial law. After Yoon Seok yeol declared emergency martial law on the evening of December 3rd, many people, including opposition supporters, gathered in front of the parliament at 3am local time on December 4th. Through the lens of CCTV reporters, these supporters could be seen holding flags and shouting slogans, demanding that Yoon Seok yeol withdraw the emergency martial law order. The martial law command once mobilized helicopters and soldiers to enter the parliament, but so far there has been no serious conflict. Outside the parliament, many people attempted to enter and engaged in pushing and shoving with the police on the scene. As the crowd gathers more and more, the roads in front of Congress have been completely closed to vehicular traffic.

South Korean President Yoon Suk yeol: Respecting the opinions of the National Assembly will lift martial law

On the early morning of December 4th local time, South Korean President Yoon Suk yeol delivered another televised speech, stating that after the South Korean National Assembly demanded the lifting of martial law, he respected the opinions of the parliament and had withdrawn the martial law troops. An emergency state conference will be held later to lift martial law. The South Korean Joint Staff Headquarters stated that all troops deployed due to the emergency martial law order will be withdrawn from 4:22 am on the 4th.

South Korea may fall into a period of political instability, weakening confidence in the economy

The South Korean State Council unanimously voted to end martial law. Although South Korea has implemented martial law 16 times since its founding in 1948, this announcement of martial law is the first time South Korea has implemented military rule since the 1980s. Prior to this, some analysts predicted that this intense move would lead to the impeachment and removal of South Korean President Yoon Suk yeol. This incident may lead South Korea into a period of political instability, which will weaken people's confidence in the economy. Abishur Prakash, founder of the strategic consulting firm The Geopolitical Business, said, "If the political crisis continues, South Korea may face various obstacles and paralysis no matter what measures it wants to take domestically and globally, including dealing with President Trump

Federal Reserve Governor Kugler expects employment situation to rebound from the weakness reported in October

Federal Reserve Governor Kugler stated that she expects the November employment growth report to be released on Friday, showing a rebound in November employment growth from the weak data affected by last month's storms and strikes. The latest employment data on Friday will rebound, maybe not completely, but we will see some, "Kugler said at the Detroit Economic Club. The United States may have basically reached full employment," the question is whether we can maintain this state

Federal Reserve Daley: Federal Reserve decision-makers need to be open-minded about the timing of interest rate cuts

San Francisco Federal Reserve Bank President Daley said on Tuesday that due to the good economic situation in the United States, inflation is expected to reach 2%, and the labor market is completely balanced, it is not impossible for the Federal Reserve to cut interest rates at its upcoming meeting on December 17-18, but it is also not a certainty. We must continue to adjust our policies. Whether it will be in December or later, this is an issue we will have the opportunity to debate and discuss at our next meeting, "said Daley." I think we need to maintain an open mind and gather more information

French President Macron: Believing the government can withstand a vote of no confidence

French President Macron said he believes the French government can survive Wednesday's vote of no confidence. Le Pen's far right faction is expected to join forces with the Left Alliance to overthrow the government at that time. The French National Assembly will hold a vote in Paris one day later, triggered by controversy over the budget proposal. If the National Alliance supports this motion of no confidence, it will be a vote in favor of intolerable cynicism, "Macron told reporters in Riyadh on Tuesday." I cannot believe they will vote for "the Left Alliance's motion. Macron also stated that he will not resign from the presidency before the end of his term in 2027.

The US Treasury Department announces sanctions on 35 entities and vessels related to Iran

On December 3rd local time, the Office of Foreign Assets Control (OFAC) of the US Treasury Department issued a statement announcing sanctions on 35 entities and vessels that play a key role in transporting Iranian oil to foreign markets. The statement stated that oil revenue provided the Iranian regime with resources to fund its nuclear program, develop advanced drones, and missiles.

Zelensky said Ukraine has tested multiple new missiles to accelerate missile production

On December 3rd local time, Ukrainian President Zelensky announced the convening of a meeting of the Supreme Command, with a focus on discussing Ukraine's missile development plan. Zelensky emphasized that he has received test reports for multiple new missiles and stated that he will accelerate missile production.

German trade union IG Metall: Nearly 100000 workers participate in Volkswagen strike

The German trade union IG Metall stated that nearly 100000 Volkswagen workers participated in a warning strike on Monday to protest the company's plans to cut costs. The strike started on Monday and lasted until Tuesday, with the aim of resisting Volkswagen's plan to close factories, significantly lay off employees, and reduce wages. Previously, Volkswagen had proposed a plan to reduce employee wages by 10% and planned to close at least three German factories, laying off tens of thousands of employees. The third round of collective bargaining between worker representatives and Volkswagen ended last week, but no agreement was reached. The next round of negotiations will be held on December 9th. IG Metall stated that 98650 employees participated in the warning strike held on Monday at nine factories. There are over 60000 employees at the main factory in Wolfsburg, of which approximately 47000 workers participated in the strike.

Domestic news

Zhou Ji, academician of the CAE Member: There are three strategic directions for the innovative development of China's equipment manufacturing industry

On December 3rd, the main forum of the opening ceremony of the 2024 Equipment Manufacturing Industry Development Conference with the theme of "Better Equipment, Better World - Intelligence, Green, Integration" was held in Chongqing. The conference was hosted by the China Machinery Industry Federation and jointly organized by the Chongqing Hub Port Industrial Park and the Machinery Industry Information Research Institute. Zhou Ji, an academician of the CAE Member and director of the National Strategic Advisory Committee for Building a Powerful Manufacturing Country, pointed out that the new generation of AI enabled and green energy advanced equipment is the historical opportunity and main technical route for the innovative development of China's equipment manufacturing industry. The strategic direction for the innovative development of China's equipment manufacturing industry will be in the following three points: high-end equipment - moving towards the middle and high end of the world equipment industry chain; Equipment intelligence - transforming into the "digital generation", promoting the "networked generation", and upgrading the "intelligent generation"; Green equipment - China's green energy equipment leads the world's green energy revolution.

In the first three quarters, China undertook over 70% of global green ship orders

According to statistics from Shanghai Customs, from January to October this year, Shanghai Customs supervised the export of large ships and port machinery in the form of processing trade, with a total export value of 60.63 billion yuan. Among them, the export value of ships was 45.56 billion yuan, an increase of 53.2% and 59.4% year-on-year, respectively. In the first three quarters of this year, China undertook over 70% of global green ship orders and achieved full coverage of mainstream ship types. From January to October 2024, Shanghai Customs supervised the export of 24 new energy ships through processing trade, with a total amount of 21.56 billion yuan, a year-on-year increase of 29.1%