Newsletter summary

Us April ISM manufacturing and services PMI, non-farm payrolls report and other data show a cooling economyWsoppokerThe Fed's May meeting hinted that the timing of the rate cut depends on the data.WsoppokerThe market expects the probability of interest rate cuts to rise to 37% in July and may cut interest rates twice this year. Precious metal prices have stopped falling and rebounded, and the implied volatility of gold options remains high. It is recommended to buy call options or build a bull market spread combination during the gold price pullback.

Text of news flash

During the May Day holiday, a number of macro data released by the United States, such as ISM manufacturing and service PMI, and non-farm payrolls report, all showed an overall cooling of the economy. The Fed's May meeting hinted that the timing of interest rate cuts would be based on economic data and would slow the pace of quantitative tightening. As a result, interest rates on US bonds and the dollar index have been adjusted, and market expectations for Fed interest rate cuts this year have risen. FedWatch tools show that the probability of interest rate cuts in July has risen to 37%, and the number of interest rate cuts is expected to increase to 2 times this year, with a cumulative rate cut of about 50 basis points.

Us economic data such as PMI and labor market are weak in April, and financial markets are not confident that the Fed will cut interest rates in the future. Precious metal prices stopped falling and rebounded after the data landed. CMX gold futures were supported around $2380 / oz, while CMX silver futures were at 26.Wsoppoker.5 U.S. dollars / ounce price to stop rising near the level. Precious metals prices reacted weakly as the market still needed to observe more economic data.

[gold option Hidden volatility High volatility Strategy suggests buying call options or building a bull market spread combination] in the options market, the implied volatility of gold options continues to rise and maintains high volatility after mid-April. The hidden volatility rate of the main AU2406 option contract rose to 22.Wsoppoker.44%, a substantial increase from 15.01% in the previous period. Shanghai gold prices are fluctuating at historic highs, and it is expected that the hidden volatility rate will fall somewhat. Strategically, it is recommended to buy call options or build a bull market spread combination during the gold price correction, while the volatility strategy suggests to wait and see for the time being.