Interest rate cut expectations and optimistic sentiment from government reopening boost risk assets, Nasdaq futures rise 0.5%, U.S. Treasury yields increase, gold retreats

Weak U.S. employment data has strengthened market expectations for a Federal Reserve interest rate cut. Coupled with the Senate's passage of a temporary bill, which led the market to believe that the U.S. government will soon reopen, optimistic sentiment has driven risk assets to generally strengthen.

On November 12, U.S. stock index futures rose collectively, Asian stock indices saw more gains than losses, U.S. Treasury yields rose across the board, and the U.S. dollar index ended a five-day decline with a slight rebound. Commodity trends were mixed, with spot silver rising, spot gold weakening, oil prices falling, and cryptocurrencies continuing to adjust.

Market focus is on the voting results regarding the government restart on Wednesday. During the U.S. government shutdown, private data such as ADP has drawn significant attention, and investors are preparing for the delayed economic data that may be released once government agencies reopen. Rajeev De Mello, Global Macro Portfolio Manager at Gama Asset Management, stated:

"As government functions resume, we expect economic data to become clearer, which is an important step in assessing the potential strength of U.S. economic activity. Investor positions are being adjusted based on a series of favorable factors."

Core market trends are as follows:

• U.S. stock index futures rose collectively, with S&P 500 futures up 0.26%, Nasdaq 100 futures up 0.5%, and Dow Jones futures up over 0.1%.
• The Nikkei 225 index closed up 0.4%, and the Korea Composite Stock Price Index rose over 1%.
• The 10-year U.S. Treasury yield fell 3 basis points to 4.08%.
• The U.S. dollar index rose slightly by 0.03% to 99.48; the yen against the dollar briefly fell to 154.79, the lowest level since February.
• Spot silver rose 1% to $51/ounce, spot gold fell 0.2% to $4,118/ounce, and WTI crude oil fell nearly 0.4% to $60.75/barrel.
• Bitcoin fell 1.4% to $103,316 per coin, and Ethereum fell over 2.8%.

Weak U.S. employment data has reinforced expectations for a Federal Reserve interest rate cut, driving U.S. stock index futures collectively higher, with Nasdaq futures up 0.5%. If economic data releases resume after the government reopens, it may further solidify market expectations for easing policies.

According to data released by ADP Research on Tuesday, U.S. companies averaged 11,250 layoffs per week over the four weeks ending October 25. Recently, multiple companies have announced layoff plans, further intensifying market concerns about the labor market. According to a previous report by Challenger, the number of layoffs announced by employers in October reached a 20-year high, reflecting a potential structural weakening in the U.S. labor market.

The overnight rise in U.S. stocks boosted sentiment in Asian markets, with the Nikkei 225 index closing up 0.4% and the Korea Composite Stock Price Index rising over 1%. Sector performance was notably mixed: driven by expectations that the U.S. government shutdown may end this week, cyclical and economically sensitive sectors generally strengthened, while the technology sector showed relatively weak performance

The Japanese yen once fell to 154.79 against the US dollar, the lowest level since February, and narrowed its decline after Japanese Finance Minister Katsunobu Kato's speech, hovering around 154.6. According to an article from Wallstreetcn, market analysis suggests that the risk of the Japanese government implementing currency intervention is rising. A Goldman Sachs report indicates that the likelihood of immediate market intervention by Japanese authorities is low. The current depreciation of the yen has not yet met the conventional conditions for triggering intervention. The possibility of intervention will significantly increase only when the USD/JPY exchange rate reaches the 161-162 range.

Spot gold fell 0.2% to $4,118 per ounce.

Spot silver rose 1%, reported at $51 per ounce.