Last week, the global financial markets experienced a significant earthquake. The Non-Farm Payrolls report far exceeded expectations, further suppressing speculation of a Federal Reserve interest rate cut. US stocks across the board closed lower, with gold consecutively reaching new historical highs. The US dollar fluctuated but ultimately closed lower, while tensions in the Middle East stimulated a rise in oil prices by over 4%. The yen once again challenged the central bank's bottom line.

Looking at market performance, all three major US stock indexes fell last week, with the Dow posting its worst weekly performance of the year. Both the stock and bond markets recorded their biggest declines of the year on Monday and Tuesday, while the S&P 500 saw its largest reversal since August on Thursday. ETFs tracking long-term bonds had their worst week since October last year, and 10-year bond yields reached their highest level in over four months. After the release of non-farm payroll data, US stock index futures fell briefly, with gains narrowing. The yield on 10-year US Treasuries rose by 9.8 basis points to 4.406%, while the 2-year yield, sensitive to interest rates, increased by 10.3 basis points to 4.744%.

After a sharp rise, the US dollar fell sharply last week, ending down 0.2%, while gold continued to refresh historical highs, briefly breaking through the $2,300 mark. Turmoil in the Middle East, along with far better-than-expected US March non-farm payrolls, speculation about the Federal Reserve's interest rate cuts, and the resulting increase in international gold prices, pushed gold to new historic highs. The spot gold price closed up 4.30% for the week, rising for the third consecutive week to $2,329.50 per ounce, briefly reaching a historic high of $2,330.50 per ounce during trading.

Last week, there was a surge in crude oil prices, with Brent crude oil breaking through the $90 per barrel mark and WTI crude oil also surging above $87 per barrel. Escalating tensions in the Middle East prompted a dramatic repricing of geopolitical risks, intensifying concerns about broader regional conflicts. Oil prices have soared by more than 20% this year.

The US dollar fluctuated last week, exhibiting a somewhat volatile trend. It mostly traded within the 150-140 range, pressuring the dollar to its low point on Thursday. The US dollar index fell 0.24% last week, experiencing a turbulent week, dropping from its high in May to its low last week.

Bitcoin had a strong performance in the first quarter, rising since the beginning of the year. There has been significant demand for spot Bitcoin ETF advisors, and the upcoming Bitcoin halving event (expected in mid to late April) will halve the new issuance of Bitcoin, thereby suppressing new supply. Historically, Bitcoin "halving" events have led to significant increases in Bitcoin prices.

Outlook for the Week:

Last week saw intense volatility in the markets, driven by the impressive non-farm payroll report, heightened tensions in the Middle East, and continuous noise from Federal Reserve officials. Gold consecutively hit multiple historical highs, while the Dow Jones Industrial Average posted its worst weekly performance of the year so far. The US dollar continued to be under pressure. Looking ahead to this week, decisions from the European Central Bank, Bank of Canada, and Reserve Bank of New Zealand will be key, with a focus on the ECB, which may signal a rate cut to come in June. In the US, the dollar will be influenced by inflation data and the minutes from the latest Federal Reserve meeting.

Over the past year, the eurozone economy has endured a challenging period. Global trade recovery has suppressed export demand, compounded by a recession in the country's manufacturing sector, leading to almost stagnant economic growth. The ECB may use this week's Thursday meeting as a stepping stone to prepare for a summer rate cut. Lagarde may overstate progress made in inflation.

For the euro, its bleak economic fundamentals paint a negative picture. One reason the euro has shown such resilience over the past year is the sharp drop in natural gas prices, which has benefited the euro through trade channels. Currently, the euro needs low stock prices and continually rising stock markets to sustain it. Otherwise, traders may start to focus on weak growth prospects and rate cuts.

In the US, focus will be on Wednesday's release of soaring CPI data and the minutes from the most recent Federal Reserve meeting. This will help investors determine whether the Fed will cut rates in June, with the market currently estimating a 70% chance of a rate cut. Forecasted surges in inflation are expected to accelerate once again, with March CPI rising sharply from 3.2% to 3.4%. However, core inflation is expected to plummet to 3.7%. This difference likely reflects an increase in that month, as core data excludes the impact of energy prices.

This will be a mixed report for the Federal Reserve. The drop in core inflation will indicate that the broader anti-inflation trend will continue, even as energy increases keep overall inflation elevated.

Overall, the US economic fundamentals appear stronger than most regions. US GDP is expected to reach 2.5% this quarter. Therefore, the overall outlook for the dollar seems positive, requiring more weakness in foreign economies or a risk-averse atmosphere to stimulate demand for safe-haven assets.

The Bank of Canada is expected to maintain its key policy rate at 0.5% this Wednesday and revise economic forecasts to reflect stronger-than-expected economic growth earlier in the year and the long-term impact of government restrictions on temporary residents.

Elsewhere, central banks from New Zealand to the eurozone to Peru will hold meetings, while Israeli economists are torn between rate cuts and pauses. Other important data to be released on Friday includes monthly GDP data from the UK.

A series of central banks across Asia will hold meetings in the coming week, with Thailand, New Zealand, and South Korea expected to maintain their policy stance. In terms of data, China's consumer inflation rate for March is expected to be revised down to 0.4%, while the decline in producer prices may slightly ease to 2.8%, providing support for more stimulus in the coming months.

Overview of Important Events and Economic Data for the Week: (Beijing Time)

Important Events:

Tuesday (April 9th): Speech by 2026 FOMC Voting Member and President of the Minneapolis Federal Reserve, Kashkari.

Wednesday (April 10th): Release of Interest Rate Decision and Monetary Policy Assessment Report by the Reserve Bank of New Zealand; Speech by the Governor of the Bank of Japan, Kuroda; Monthly Short-Term Energy Outlook Report by the EIA; Release of Interest Rate Decision and Monetary Policy Report by the Bank of Canada.

Thursday (April 11th): Release of March Monetary Policy Meeting Minutes by the Federal Reserve; Announcement of Interest Rate Decision by the European Central Bank; Press Conference on Monetary Policy by ECB President Lagarde; Speech by FOMC Permanent Voting Member and President of the New York Federal Reserve, Williams.

Friday (April 12th): Speech by 2024 FOMC Voting Member and President of the San Francisco Federal Reserve, Daly, at a Financial Technology Conference.

Economic Data Overview:

Monday (April 8th): Eurozone Sentix Investor Confidence Index for April; New York Fed's 1-Year Inflation Expectations for March (%).

Tuesday (April 9th): ANZ Consumer Confidence Index for the week ending April 7th in Australia; Trade Balance for February in France (billion euros).

Wednesday (April 10th): API Crude Oil Inventory Change for the week ending April 5th in the US; Official Cash Rate Decision for April in New Zealand (%); Unadjusted Yearly CPI for March in the US; Unadjusted Yearly Core CPI for March in the US; Ipsos Primary Consumer Sentiment Index (PCSI) for April in the US.

Thursday (April 11th): PPI/CPI Yearly Rates for March in China (%); Main Refinancing Rate for April in the Eurozone (%); Initial Jobless Claims for the week ending April 6th in the US (thousands); PPI Yearly Rate for March in the US (%); Core PPI Yearly Rate for March in the US (%).

Friday (April 12th): Monthly Industrial Output Rate for February in the UK (%); Seasonally Adjusted Goods Trade Balance for February in the UK (billion pounds); Monthly GDP Rate for February in the UK (%); Preliminary University of Michigan Consumer Sentiment Index for April in the US.

Spot Silver: Silver surged significantly last week, rising by over 10%, reaching a three-year high.

Silver saw a substantial surge last week, with a closing increase of over 10%, reaching a three-year high after hitting levels last seen in June 2021. This marks the largest weekly gain since August 2020. The weekend trading price for silver was $27.493 per troy ounce. The precious metals sector shrugged off optimistic US employment reports, which could delay the Fed's significant rate cut in June. According to the CME FedWatch tool, market participants reduced their bets on a 25 basis point rate cut in June, but expectations for a cut in July are still ongoing. Silver follows in the footsteps of gold, despite the latter's trading price being at historic highs. Long-term silver demand remains bullish due to escalating tensions in the Middle East. Israeli forces bombed the Iranian embassy near the Syrian capital, deepening concerns about Iran's involvement in the Israel-Palestine conflict.

The daily chart shows silver falling to $26.29 after the release of US non-farm payroll data, but subsequently rebounding to $27.495, a three-year high. Despite the 14-day Relative Strength Index (RSI) being in overbought territory (74.55), it still points upwards, indicating buyers are gaining momentum. This suggests that the next resistance level for silver is the psychological barrier of $28.00. Following that are the highs of June 10, 2021, at $28.28, and $28.750 (the high in May 2021). On the other hand, if the 14-day RSI falls below the 70 level, it could trigger a silver pullback towards $27.00 (a round number). The next support level is the high of May 5, 2023, at $26.12, followed by $26.00. The monthly chart shows silver price breaking above the upper resistance line of the "symmetrical triangle" at $24.95, indicating a bullish long-term trend for silver.

Conclusion for this week: The monthly chart shows silver price breaking above the upper resistance line of the "symmetri

cal triangle" at $24.95, indicating a bullish long-term trend for silver.

Range for this week: $23.38 - $25.85. Strategy for this week: It is advisable to buy silver on dips this week.

USD/CNH (Offshore Chinese Yuan): The offshore Chinese yuan rebounded from its low two weeks ago of 7.2818 to 7.2400 before last weekend.

Benefiting from the decline in the US dollar, the offshore yuan against the US dollar has remained stable, currently fluctuating around 7.24. Looking at several earlier economic data points, China's economic recovery seems to be solid, and currently the exchange rate is close to the upper limit of the 2% fluctuation range around the central parity rate. Therefore, the space for further weakening of the yuan is limited. To support the exchange rate of the yuan, it is expected that the authorities will continue to maintain the central parity rate around 7.09 and continue to tighten the liquidity of the offshore yuan, increasing the cost of short selling. The latest data released by the National Bureau of Statistics of China last week showed that the official Purchasing Managers' Index (PMI) for the manufacturing sector rose from the previous value of 49.1 to 50.8 in March, with the expected value being 49.9. At the same time, the non-manufacturing PMI of the National Bureau of Statistics rose from 51.4 in February to 53.0 in March. On the other hand, Xu Zhibin, Deputy Director of the State Administration of Foreign Exchange of China, stated at the Boao Forum Annual Conference that "financial market opening will be steadily promoted" and "cross-border investment facilitation policies will be improved"; further expanding the opening of the capital account. With the improvement of domestic data and encouraging comments from Chinese foreign exchange regulators, the yuan rebounded from its low two weeks ago of 7.2818 to 7.2400 before last weekend.

From a technical perspective, benefiting from the recent decline in the US dollar, the offshore yuan against the US dollar continues to stabilize, rebounding from its low two weeks ago of 7.2818 to 7.2400 before last weekend. Currently, it is fluctuating in the range of 7.24-7.26. At this stage, the USD/CNH is forming a "descending triangle" on the daily chart. If it can successfully break below the support line of the triangle at 7.2370 this week, the target price for the "descending triangle" decline would be 7.1922 {7.2370 - (7.2818 - 7.2370)}; the next level would then target 7.1892 (100-day moving average). Since the 14-day Relative Strength Index (RSI) is still in positive territory (57.95), indicating short-term weakness in the offshore yuan against the US dollar. Once the US dollar rises above 7.2540 (upper resistance line of the descending triangle) and 7.2528 (9-day moving average), the next target would be 7.2662 (last week's high). Breaking above these resistance levels would not rule out another attempt to test the levels around 7.2820 (previous week's high) and 7.2877 (78.6% Fibonacci retracement level of the range from 7.3423 to 7.0874).

Conclusion for this week: The recent optimism in the Chinese macroeconomic situation has spilled over to the yuan. The USD/CNH is approaching the upper limit of the 2% trading range. In the short term, the market will continue to focus on the movement of the central parity rate. The central parity rate may continue to consolidate around 7.09 in the short term, buying more time for the global weakness of the US dollar and the domestic sentiment recovery.

Range for this week: 7.1922—7.2820

Strategy for this week: It is recommended to sell the US dollar on rallies this week.

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