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Today's Market Focus: China's central bank increased gold reserves for 11 months.

TraderKnows
TraderKnows
05-15

The Chinese central bank has increased its gold reserves for 11 consecutive months, real estate transactions in Shanghai and Guangzhou doubled during the "Golden October", and the war for deposits has swept from Hong Kong to the mainland.

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China Market

1. The People's Bank of China increases gold reserves for 11 consecutive months

Affected by exchange rate conversion and asset price changes, China's foreign exchange reserves decreased in August, while its gold reserves rose for the 11th consecutive month. At the end of September, China's gold reserves were reported at 70.46 million ounces, an increase of 840,000 ounces month-over-month. Since November last year, China's gold reserves have grown for 11 consecutive months. Over the past 11 months, the People's Bank of China has cumulatively increased its gold reserve by 7.82 million ounces. In the first seven months of this year, the Bank has increased its gold holdings by approximately 126 tons, making it the world's largest gold buyer.

Gold Reserves

2. Property "Silver October" sees doubled transactions in Shanghai and Guangzhou

Recently, various localities have introduced policies to optimize the real estate market, which in turn has somewhat boosted buyer confidence. Sales data released by the China Index Research Institute on October 7 showed that, although the real estate market's "Silver October" started off flat, the daily average transaction area in Shanghai and Guangzhou experienced a doubling compared to the same period last year. Specifically, during the "Double Festival" holiday period, the transaction area in Shanghai and Guangzhou was 123,000 square meters and 157,000 square meters, respectively, increasing by 159% and 129%.

3. The deposit battle sweeps from Hong Kong to the mainland

This National Day, tourist spots were packed with crowds, revealing people's immense enthusiasm for travel. However, before the National Day holiday, a different kind of "tourism" had already become very popular, that is, the commando-style saving. Many people from the mainland went to Hong Kong to deposit money, leaving on the same day they arrived. In early June, the interest rate for five-year fixed deposits at the four major banks was reduced by 15 basis points to 2.5%, and then again to 2.25% in early September. Meanwhile, the Hong Kong Monetary Authority raised the base rate from 0.5% to 5.75% from 2022 to July this year, reaching the highest level since 2007.

Overseas Market

1. Israel announces state of war

According to CCTC News Client, based on the latest news from Israel's emergency organization "Magen David Adom," the rocket attack in the early morning of the 7th has resulted in one death and 16 injuries in Israel, with two of them being severe. Meanwhile, the Israel Defense Forces have declared the country is now in a state of war. The declaration pointed out that Hamas, the Palestinian Islamic Resistance Movement, will bear full responsibility and consequences for this attack.

2. Japan invites global asset management giants for investment

For the Japanese government, the window of time to maintain global interest in it is limited. If the interest rate differential between Japan and the USA narrows, investors' interest in Japan will gradually fade. If Japan fails to attract enough external capital, it might miss the last chance for achieving economic growth and market prosperity. Japanese Prime Minister Fumio Kishida has called on asset management giants like BlackRock to invest in "Japan's future" during a roundtable meeting.

3. EU plans to delay tariffs on British electric vehicles

Maros Sefcovic, the European Commission Vice-President responsible for overseeing the Brexit agreement, told the media that the EU is drafting a plan to postpone tariffs on British electric vehicles for one year. Sefcovic said that the EU would interpret the "Made in Europe" regulations more leniently, allowing car manufacturers more time to shift their battery sourcing from Asia to Europe. The European Commission hopes to redefine what constitutes a European product according to the so-called "rules of origin."

4. Tesla reduces prices for Model 3 and Model Y in the US

Affected by the delivery volume in the third quarter falling short of analysts' expectations, Tesla has announced another price reduction for some variants of Model 3 and Model Y in the US. Specifically, the starting price for the standard version of Model 3 has been reduced from the previous $40,240 to $38,990, the long-range version's starting price from $47,240 to $45,990, and the performance version's starting price from $53,240 to $50,990. Likewise, the starting price for Tesla's Model Y performance version has been reduced from $54,490 to $52,490, and the long-range version's starting price from $50,490 to $48,490.

Looking Ahead to Next Week

Next week, investors should pay attention to key data such as the Eurozone Sentix Investor Confidence Index, German Industrial Output and CPI, China's Money Supply and Trade Balance, the UK Industrial Output and Trade Balance, the US PPI, CPI, Initial Jobless Claims, and the API and EIA Crude Oil Inventories, along with the preliminary values for the University of Michigan's Consumer Sentiment Index. Besides, investors should also keep an eye on risk events such as the Israel-Palestine situation and speeches by the Dallas Federal Reserve President.

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Risk Warning and Disclaimer

The market carries risks, and investment should be cautious. This article does not constitute personal investment advice and has not taken into account individual users' specific investment goals, financial situations, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their particular circumstances. Investing based on this is at one's own responsibility.

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