October 1 - October 6 Global Geopolitical Dynamics:
1. The Zaporizhzhia Nuclear Power Plant in Ukraine has become the focus of the recent Russia-Ukraine war, which is a dangerous signal.
2. If Hamas does not release the hostages within 72 hours, Israel will restart the war. However, Hamas has also stated that completing the release within 72 hours is very difficult, and the fighting in Gaza is hard to completely cease.
3. Russia has reiterated that if Trump provides Ukraine with Tomahawk cruise missiles, it will damage the friendship between the two countries.
4. Iran has officially abandoned the GPS positioning system and switched to the BeiDou positioning system, while also stating that it will develop its own positioning system in the next five years.
5. Several key officials in Palestine have fled the country due to involvement in corruption. Currently, it appears that the data indicates a national anti-corruption effort, but there may be deeper motives, such as political maneuvering.
6. After a week, NATO continues to expand its military presence along the eastern front, including weapons and aircraft, enhancing NATO's eastern defense.
7. Venezuela continues to confront the United States.
Intra-day assessment:
After a week, there has not been much change in the geopolitical landscape. On the main battlefield, the Russia-Ukraine situation remains tense, with focus concentrated on the nuclear power plant. The situation is slightly tense but still controllable. The key in the near term is whether the U.S. will provide Ukraine with Tomahawk cruise missiles.
Venezuela and the U.S. remain in direct confrontation, but there have not been many substantial actions, and the current risk is low.
In the Middle East, Israel's focus has recently been on Gaza and Palestine, while the conflict with Iran has temporarily eased, especially regarding Hamas's handling in Gaza and the potential regime change in Palestine, which may be priorities for Israel.
Of course, this does not mean that the conflict between Israel and Iran has disappeared; it has just been placed in subsequent processing. Once Israel resolves the issues in Gaza and Palestine, Iran will still be the primary target.
Global Market Dynamics on October 6: Inflation Concerns + Government Credit Worries + Liquidity Redistribution Phase!
1. Gold accelerated its rise, up 1.74% for the day, currently priced at $3963 per ounce.
2. International crude oil prices rose 1.68% for the day, priced at $65.57 per barrel.
3. Prices of U.S. Treasury bonds for 1 year, 10 years, and 30 years accelerated upward, with the 10-year and 30-year bonds rising 0.95% for the day.
4. The U.S. dollar index rose 0.4% for the day, currently around 98.
5. The NASDAQ, S&P, and Russell indices rose, while the Dow Jones index fell.
6. The VIX index is at 16.36%, down 1.68% for the day.
Daily Assessment:
From the current dynamics of global assets, aside from crude oil prices fluctuating due to geopolitical changes, other data show the current market's uncertainty.
First, inflation concerns have increased demand for long-term bond yields, contributing to the rise in U.S. long-term bond yields.
Second, due to the government shutdown, U.S. government credit has been damaged, leading to increased safe-haven demand for gold, which also caused a sell-off in U.S. bonds, further pushing up bond yields.
The rise in the U.S. dollar index is partly due to the new Japanese Prime Minister's policy direction putting pressure on the yen, indirectly pushing up the dollar. On the other hand, the sell-off of U.S. bonds has been converted into dollars, leading to an increase in the dollar index.
Therefore, the current market is trading on multiple factors, causing both risk assets and safe-haven assets to rise simultaneously, with optimism coexisting with concerns. The focus now should be on which direction macro sentiment will lead, as this divergent situation will not last long.
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