Trump's policy leads to immigration outflow, analysis of short-term trends of spot gold, silver, crude oil and foreign exchange on September 18

Global Market Review

1. European and American market trends

The three major U.S. stock index futures rose, Dow futures rose 0.65%, S&P 500 futures rose 0.81%, and Nasdaq futures rose 1.09%. The German DAX index rose 1.35%, the UK FTSE 100 index rose 0.29%, the French CAC40 index rose 1.23%, and the European Stoke 50 index rose 1.55%.

2. Market news interpretation

Trump policy has caused immigrants to flow out. Asylum applications for border asylum in Quebec, Canada surged by 263%.

Affected by Trump's policy, a large number of immigrants and even some American citizens chose to leave the United States. Since early July, Canadian officials have received more than 5,500 asylum applications at the St. Bernard-de-Lacoll border port in southern Montreal. According to the Canadian Border Services data, this figure is up 263% from the same period last year.

U.S. bond repurchase rate plummeted, and loose expectations attracted attention

⑴ The repurchase rate plummeted 24 basis points to 4.18% yesterday, in line with yesterday's 25 basis points interest rate cut. The new interest rate range is set between 4.00% and 4.25%, and the settlement of treasury bonds has resulted in a $11 billion outflow of funds, keeping the overnight interest rate in the upper half of the new interest rate range. ⑵ The market generally expects another 25 basis points in October, with the probability of up to 90%. Therefore, a large number of long positions are unclosed and tight funds will continue to push up interest rates. Funds such as Freddie Mac and Fannie Mac are expected to start entering the market tomorrow, which may temporarily alleviate the pressure on rising interest rates. ⑶ According to institutional data,The new interest rates of RRP and IOER are 4.00% and 4.15% respectively. The premium of five-year Treasury bonds fell by 15 basis points to negative 10 basis points, and the premium of twenty-year Treasury bonds fell by 27 basis points to negative 78 basis points, and short-term positions decreased. ⑷ The repurchase rate of mortgage-backed securities is 3 basis points higher than the repurchase rate, and 3 basis points tightened xm-forex.compared with yesterday. According to institutional data, SOFR futures prices show that the probability of a 25 basis point cut in October is 90%, and the overnight index swap (OIS) contract with the 0x3 term also indicates another rate cut. ⑸ The winning rate of the 4-month Treasury bill auction on Wednesday was 3.815%. A series of Treasury bill auctions and issuances will be held on Thursday (Beijing time). The short-term repurchase quotation is about 8 basis points higher than the repurchase rate, such as 4.25% for one month, 4.26% for two months, and 4.26% for three months.

European and American markets rose in unison, with the Federal Reserve cutting interest rates a key driver

⑴ The Federal Reserve cut key interest rates by 0.25 basis points on Wednesday. Affected by this, major European stock indexes generally rose. ⑵ German DAX index and French CAC40 index performed particularly strongly, up 1.25% and 1.21% respectively. ⑶The London blue-chip stock FTSE 100 index rose relatively small, up only 0.3%. This is because the Bank of England chose to keep interest rates at 4%, and said it would slow down the quantitative tightening process. ⑷ In the US market, stock index futures are also showing a positive trend. S&P 500 futures rose 0.8%, Dow Jones Industrial Average futures rose 0.7%, while Nasdaq futures rose the most, reaching 1.1%.

Triple pressures extinguish the prosperity of the Argentine capital market. Hope small brokers are under pressure.

Argentina's local asset prices have declined, capital controls continue to exist, and the economy is still avoided by foreign investors. These factors are extinguishing the hope of prosperity of the country's capital market and also putting heavy pressure on small brokers that have bet on Mile's market recovery after taking office two years ago. Argentina Securities Regulatory Authority (CNV) reminds brokers that losses exceeding 15% of their equity must be disclosed - the provision aims to promote securities firms to recapitalize if necessary. Pablo Repetto, head of research at Orum Securities, said: "In an environment full of uncertainty, the interest rate of Biso is fluctuating significantly, resulting in mediocre performance in the entire industry, and the losses of brokers have exacerbated the increasingly pessimistic financial and political situation of the Milei government." Brazilian President Lula encountered a setback in "People-friendly loans" and caused a surge in overdue rates

According to foreign media reports, Brazilian President Lula launched a plan this year to make a special loan plan for low-income borrowers more affordable. However, things went against our expectations, and these loans became more expensive, and banks and governments are trying to solve this problem urgently. The program, known as "Lula Loan", is a core mechanism for opening a government database containing salary data for private sector employees to banks and fintech xm-forex.companies, and providing lenders with "guarantees when borrowers are unemployed"——That is, if the borrower is unemployed, it can reduce risks for lenders. The plan was launched as a program that "can allow up to 50 million people to enjoy lower loan interest rates while reducing bank risks." However, a large number of technical problems were exposed during the implementation of the plan: in some cases, the loan repayment deducted from the employee's salary was misdirected to other lending institutions; in other cases, the bank could not determine the corresponding customer after receiving the repayment. The consequence is that the loan overdue rate of the new plan soared to a high of 16% in August, forcing lenders to raise loan interest rates.

Data confuses the Fed, policy paths are full of fog

⑴ The U.S. Federal Reserve announced its first rate cut in nearly nine months on Wednesday, with the reason aimed at dealing with the growing risks in the labor market. ⑵ Although the Fed Chairman claims that employment risks have risen sharply and outweigh inflation risks, policy makers have lowered the median expected unemployment rate in 2026 and 2027 to 4.4% and 4.3%, respectively. ⑶ At the same time, the Fed raised its GDP growth expectations this year and next year, as well as its inflation prospects next year. ⑷ The updated dot map shows that officials are expected to cut interest rates three times this year, higher than the two expected in June, but they seem to lack confidence in these predictions, and the chairman also admitted that he is in a "sequence-by-conference" decision-making situation. ⑸ Overall, while claiming that the labor market is facing downward risks, the Fed raised its growth and inflation forecasts and lowered its unemployment rate expectations, which shows that it lacks consensus within its internal economic outlook. ⑹A institutional strategist pointed out that there are multiple contradictions between the Fed's dot map and economic forecast. ⑺In addition, policy makers face great uncertainty in their employment and inflation outlook. For example, although the unemployment rate remains low, the monthly non-farm employment growth has plummeted. ⑻In addition, Trump’s tariff rhetoric and its potential impact have brought uncertainty to the inflation outlook. ⑼ Another institution chief economist also said that the Fed has tensions between the dual tasks of price stability and maximum sustainable employment, which is the core of its internal prediction contradiction. ⑽Ultimately, it is still unknown whether the Fed's interest rate cut measures are correct without a "risk-free" policy path.

The UK is trapped in a quagmire of stagflation, and the autumn budget becomes the last hope

⑴ The Bank of England maintains its interest rate decision in line with expectations. The current inflation rate remains stubbornly maintained at 3.8%, and wage growth reaches 4.7%, which continues to put upward pressure on prices. ⑵The UK has become the country with the most prominent stagflation among developed economies, and is facing the triple challenges of high inflation, weak growth and rising unemployment. ⑶ Increased employer costs and tax increases policies are aggravating inflationary pressure and dragging down economic growth. The current fiscal policy actually amplifies the risk of stagflation rather than alleviates it. ⑷ The focus of market attention turns to the fall budget. If the tax increase policy continues to be implemented, the Bank of England will face a more xm-forex.complex policy regulation environment.

The outlook for Canadian small and medium-sized enterprises is worrying, and expectations for layoffs are strengthening

⑴ According to data from the Canadian Federation of Independent Enterprises (CFIB), although Canadian small and medium-sized enterprisesThe confidence index rebounded slightly to 50.2 in September, up from 48.3 last month, but the overall outlook remains unoptimistic. ⑵ An index above 50 means more xm-forex.companies expecting sales growth, but the federation points out that the data reveals a more grim reality. ⑶ More than half of the surveyed xm-forex.companies, specifically 54.6%, see weak domestic demand as the biggest resistance to sales growth. ⑷In addition, the labor market is facing downward pressure, with 18% of xm-forex.companies saying they plan to cut their employees in the next three to four months, while only 12% expect to increase their employees, while the rest expect the number of employees to remain unchanged. ⑸ This shows that despite a slight improvement in corporate confidence, concerns about the job market remain in the xm-forex.coming months, with expectations of layoffs exceeding recruitment expectations.

New trends in European and American sanctions: Focus on encryption and energy

⑴ After a call with Trump, the President of the European xm-forex.commission said that the EU plans to submit the 19th round of sanctions proposals against Russia to member states as early as Friday. ⑵ People familiar with the matter revealed that the sanctions proposal will mainly target cryptocurrency, banking and energy sectors. ⑶Trump reiterated during the call that he prefers to put pressure on tariffs than traditional sanctions. ⑷ It is reported that the United States has put pressure on its G7 allies to impose up to 100% tariffs on India's purchase of Russian oil, but this move may face resistance in the capitals of EU member states. ⑸ At present, G7 officials are promoting relevant plans, with the goal of finalizing specific content in the next two weeks.

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

Euro/USD: As of 20:23 Beijing time, the euro/USD rose, now at 1.1819, an increase of 0.06%. Before the New York Stock Exchange, the price of (EUR/USD) began to soar from the previous trading day because it relied on the support level of 1,1780, which is the intersection of short-term trends we mentioned in our previous report, and gained a bullish momentum that helped achieve these gains, especially after reaching an oversold level, relative strength indicators began to form a positive divergence relative to the price movement. With the advent of positive signals, the main bullish trends dominate in the short term and trade along the trend line.

GBP/USD: As of 20:23 Beijing time, GBP/USD fell and is now at 1.3621, a drop of 0.02%. Before the New York Stock Exchange, affected by the stability of the 1.3665 resistance, the (GBPUSD) price fell in the last intraday trading, trying to obtain bullish momentum that could help break through that resistance, dominates the main bullish trend in the short term, and trades along the main and secondary trend lines, continuing positive pressure from trading above the EM5A0, noting that the relative strength indicator has reached oversold levels. The price trend is exaggerated, indicating a positive divergence, enhancing its chances of recovery in the xm-forex.coming period.

Spot gold: As of 20:23 Beijing time, spot gold rose, now at 3670.76, an increase of 0.30%. Before the New York Stock Exchange, the (gold) price rose on the last trading day after it received a strong bullish boost due to its reliance on EMA50 support. After reaching oversold levels, positive signals on the relative strength indicators strengthened the bullish momentum relative to the price trend, especially when the main bullish trends dominate in the short term.

Spot silver: As of 20:23 Beijing time, spot silver rose, now at 41.855, an increase of 0.50%. Before the New York Stock Exchange, the (silver) price soared on the last trading day, quickly recovering, regaining support from the EMA50, which provides new bullish momentum, with the main bullish trend dominating in the short term, and its trading is on the slash. In addition, positive signals appear on the relative strength indicators, enhancing the opportunity to expand the gains in the near term.

Crude oil market: As of 20:23 Beijing time, U.S. oil rose, now at 64.000, an increase of 0.49%. Before the New York Stock Exchange, crude oil prices began to recover on the last trading day, and previously sought an upward low as the basis for the positive momentum needed to achieve the recovery. Positive pressure from trading above the EMA50 continues, and bullish correction trends dominate in the short term. In addition, after reaching the oversold level, positive overlap signals appear on the relative strength indicators.

4. Institutional view

Dutch International: Still believe that the Bank of England will cut interest rates again this year

Dutch International Group economist James Smith said that the Bank of England is still inclined to cut interest rates further, but it is still uncertain whether it can implement interest rate cuts again this year. The Bank of England's long-standing forward-looking guidance (policy-oriented statement) has not changed, and its announcement on quantitative tightening is also in line with general expectations of investors. But Smith pointed out in a report that the August interest rate decision clearly shows that the Bank of England's attitude toward further rate cuts from previous levels is becoming increasingly cautious. Some people have even believed that this round of interest rate cut cycle has xm-forex.come to an end. Even if the timing of interest rate cuts in the future is still unclear, we do not agree with the statement that "the interest rate cut cycle has ended". We are still slightly inclined to believe that the Bank of England will cut interest rates again this year, but the certainty of this judgment is relatively low. At present, the possibility of a rate cut in November is roughly 50% for us.

TW Securities: Bank of England is expected to cut interest rates by 25BP in November

James Rossiter, head of global macro strategy at TW Securities, said: "We expect (Bank of England) to cut interest rates by another 25 basis points in November. The bank decided to lower the annual sales of UK Treasury bonds purchased from 2009 to 2021 from £100 billion to £70 billion, a move that did not exceed our expectations - because the market There has been a broad consensus on the scale of this adjustment. Despite speculations that the Bank of England may adjust its statement wording, its statement position has proved to remain conservative. ”

Deutsche Bank: The Bank of England is expected to implement a rate cut in December

Deutsche Bank Sanjay Raja said in a report that the Bank of England’s policy resolution on Thursday highlighted that there are still differences within its monetary policy xm-forex.committee and that it is still possible to cut interest rates again this year. The Bank of England decided to keep interest rates unchanged with a 7:2 vote, with two dissenting xm-forex.committee members supporting a 25 basis point cut. The bank reiterated that it will adopt a "gradual" interest rate cut strategy in the future, and that monetary policy does not set a "preset path". Raja pointed out that this means that the rate cut in the fourth quarter of 2025 is still "completely possible" - the Bank of England has not taken any steps to change market expectations on this issue. Deutsche Bank continues to maintain its original judgment: the Bank of England is expected to implement a rate cut in December and two more rate cuts in 2026.

The above content is all about "[XM Foreign Exchange Market Analysis]: Trump's policy causes immigration outflow, analysis of short-term trends of spot gold, silver, crude oil, and foreign exchange on September 18". It was carefully xm-forex.compiled and edited by the XM Foreign Exchange editor. I hope it will be helpful to your trading! Thanks for the support!

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