The US dollar rose sharply, and the probability of a rate cut in December fell to 28%.

The US dollar index ( DXY ) rose 0.65% on Wednesday, reaching a two-week high. The core catalyst was the unexpected cancellation of the October employment report by the U.S. Bureau of Labor Statistics, which directly impacted the December FOMC rate cut expectations—market rate cut probability dropped from 70% last week to 28%.

Fed officials have also turned hawkish, with the minutes from the October 28-29 meeting showing that “most” officials prefer to keep interest rates unchanged through the end of the year. Coupled with the better-than-expected trade deficit in August of (−59.6B USD vs −78.2B ), the dollar is somewhat unstoppable.

Market Reaction:

• EUR/USD fall 0.46% to a 1.5-week low, the euro is crushed by the dollar
• USD/JPY rise 0.95%, the yen once fell to a new low in October, as the Japanese government considers an additional 20 trillion yen stimulus.

Precious Metals Under Pressure: Gold rises 0.40%, silver rises 0.66%, but the increase is limited. On one hand, the strong dollar is draining liquidity, while on the other hand, the decreasing probability of interest rate cuts is suppressing demand. However, central banks are still bottom-fishing - the People's Bank of China increased its gold reserves for the 12th consecutive month in October, and global central banks bought 220 tons of gold in Q3.

Key Data Overview:

• The U.S. 30-year mortgage rate rose to 6.37%
• Japan's core machinery orders in September +4.2% ( exceeded expectations )
• The next policy meeting of the BOJ is on December 19, (, with a probability of interest rate cut at only 10%.
• Market prediction for December FOMC rate cut probability: 28%