FPG ：British and American air strikes on Yemen boost the attractiveness of risk-haven assets. Gold has the largest one-day increase since mid-December last year. 1. [U.S. PPI unexpectedly fell] According to data released by the U.S. Department of Labour on Friday, the producer price index fell 0.1% month-on-month for the third consecutive month, with an expected increase of 0.1%. The yield of U.S. 2-year Treasury bonds fell to the lowest level since May. Comments: Now the market has entered the ”trap“ of interest rate reduction expectations. No matter what news and data you may be related to the decline in inflation, it will be interpreted as an interest rate cut in the first half of next year. 2. [The Federal Reserve lost $114.3 billion last year] The Federal Reserve‘s income after deducting expenses last year was negative $114.3 billion, the highest in history. In 2022, the Federal Reserve ”profited“ $58.8 billion. Comments: The ”profit“ of the Federal Reserve has to be transferred to the Treasury Department. Now the U.S. Treasury Department needs to issue more debt to make up for more holes. 3. [The central bank’s open market will have a one-year MLF of 779 billion yuan due on January 16] According to the usual practice, the central bank will carry out the first MLF operation in 2024 today. In January, the MLF interest rate will be lowered by 15 basis points. Comments: Considering that the previous reduction in the deposit interest rate of major banks was generally 25bps, 15 basis points may be difficult to meet market expectations. 4. [ Yemeni Houthis said that the US-British airstrike on the Red Sea city of Hodeida] After the news was announced, local officials in Hodeida Province appointed by the Houthis denied that Hodeida had been attacked in an interview with the media, saying that American and British drones carried out reconnaissance of Hodeida on the same day. Comments: Geographically, Hodeida is at the entrance and exit of the Red Sea. 5. [Japanese industry began to thunderstorm] Panasonic Industry, a subsidiary of Japan‘s Panasonic Group, admitted that there were violations such as data fraud when applying for product quality certification, which can be traced back to the 1980s at the earliest. There were 52 types of illegal products, and the cumulative number of customer companies reached about 400 worldwide. Comments: Toyota’s Dafa Automobile‘s data is falsed, and now Panasonic also admits similar problems. 6. [BYD plans to build an electric vehicle factory in Brazil] BYD aims to form an integrated supply chain and has discussed supply agreements, joint ventures or acquisitions with Brazilian manufacturer Sigma lithium. Comments: In terms of profit, the upstream management, the battery and the downstream vehicle are still the most profitable links. FPG Special Analyst_(1) Opinion: The Federal Reserve released its unaudited preliminary financial statements for 2023. Due to the vigourous support of the economy during the COVID-19 pandemic and the subsequent radical interest rate hike to cope with high inflation, the Federal Reserve‘s operating loss last year reached $114.3 billion, the largest loss in history. High interest rates are one of the main reasons for the Federal Reserve’s record losses, from 2022 Since March, the Federal Reserve has raised interest rates at the fastest rate in nearly 40 years. When the Federal Reserve will resume profits depends on when it starts to cut interest rates. At present, the market generally expects that the Federal Reserve has ended the current interest rate hike cycle and will start to cut interest rates in March. FPG Special Analyst (2) Views: Gold closed higher as the United States and Britain‘ air strikes on Yemen increased the attractiveness of gold as a risk-haven investment. The attacks by the United States and the United Kingdom on Yemen have obviously exacerbated the threat of broader tensions. In addition, as global stock markets rose along with bond prices on Friday, gold prices seem to get clues from weak inflation data in the United States and China, rather than from the latest geopolitical violence. Fed officials are expected to make more concessions, and gold and other interest rate-sensitive markets will have more fluctuations before the Federal Reserve’s January meeting. The next meeting is scheduled to be held from January 30 to 31. FPG Special Analyst_(3) Opinion: The United States and Britain launched air strikes against anti-government militant targets in Yemen to retaliate for Yemen‘s continuous attacks on ships in the Red Sea, which triggered new concerns about the potential supply of energy disruption. Crude oil futures closed at a new high of more than a week; but this week it recorded a decline. As one of the most important oil supply channels to the West is threatened, it is not surprising that if tensions in the Middle East continue to escalate, the rise in crude oil prices may further push up the price per barrel. The current oil price does not reflect the geopolitical risk premium, so if the tension in the Middle East continues to escalate, the oil price may rise to more than $80 per barrel. FPG Special Analyst_4 Opinion: The U.S. December PPI data was lower than expected and sent a positive signal of downward inflation. At the same time, the fourth financial reporting quarter of U.S. stocks kicked off. The market began to evaluate the financial reports of large banks such as Morgan Stanley and Bank of America. U.S. stocks fluctuated and closed collectively throughout the day, the Dow fell nearly 120 points, and the S&P fell 0.08%. The index fell by 0.02%. The above analysis is only for the views of market researchers and is for reference only and is not Regarded as a specific investment suggestion. #Forex #trading #tradingforex