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[Quick Facts]

1. Security Council fails to adopt two draft Palestinian-Israeli resolutions.

2. U.S. House finally elects a new speaker after three weeks.

3. The yen again hits a year-low as the U.S. and Japan yield gap widens.

4. Lagarde says the fight against inflation isn't over yet.

5. Oil prices rally to near $85 on fears of Middle East conflict expansion.

6. U.S. crude oil exports fall slightly due to a variety of factors.

7. BOC is open for further rate hikes as progress on core inflation stalls.

[News Details]

Security Council fails to adopt two draft Palestinian-Israeli resolutions

The UN Security Council has voted on two draft resolutions on the Palestinian-Israeli conflict. Russia's draft resolution failed to get enough votes to pass, with China voting in favor of it. Earlier, the U.S. draft resolution was vetoed by permanent members Russia and China and failed to pass. The U.S. draft gained 10 votes in favor, three against, and two abstentions.

U.S. House finally elects a new speaker after three weeks

Mike Johnson from Louisiana, vice chairman of the House Republican Conference, won more than half of the votes in the U.S. House Speaker election on the afternoon of Oct. 25th, local time, and became the new House speaker. He was the fourth speaker nominee the House Republicans elected in three weeks.

The yen again hits a year-low as the U.S. and Japan yield gap widens

The dollar hit its highest level against the yen today since October last year as the huge yield gap between the two countries continues to weigh on the yen. This increases the risk of Japanese authorities intervening in the currency market. Japanese authorities have repeatedly said that they will take any measures to curb excessive volatility in the currency market. The yen's decline will bring pressure on the Bank of Japan to adjust monetary policy, and speculation that a possible escalation of conflict in the Middle East will boost safe-haven demand. Traders remain cautious.

Lagarde says the fight against inflation isn't over yet

The fight against inflation isn't over yet, but I have confidence that inflation can return to 2%, said European Central Bank President Christine Lagarde on Oct. 25. Central bank officials must "carefully monitor" risks, including the Middle East conflict possibly leading to higher oil prices. "We need to look at prices and wages and profit units and all that to see where the risks are. But for the moment, I'm confident that we are on a journey to bring inflation back to 2%," said Lagarde.

Oil prices rally to near $85 on fears of Middle East conflict expansion

Oil prices rose as Israel is ready to launch a ground attack on Gaza and the U.S. prepares to deploy air defenses in the region. Israeli Prime Minister Benjamin Netanyahu said in a televised address that Israel is in a battle for its very existence. Earlier, crude oil prices fluctuated sharply on a Wall Street Journal report that Israel had delayed a ground offensive as the U.S. readied its air defenses to protect U.S. troops in the Middle East.

Markets are trying to price in the possibility of multiple Middle Eastern countries becoming involved in the conflict. Traders are nervous and they may react quickly before understanding the full implications of what is happening.

U.S. crude oil exports fall slightly due to a variety of factors

U.S. crude oil exports fell slightly, which was in line with many traders' expectations. Oil shipments spiked above 5 million barrels per day last week and are now close to 4.8 million barrels per day. Strong exports have been a key reason for the reduction in U.S. inventories, but with global refining margins plummeting and freight charges spiking, the export economy is suffering and the crude spot delivery trade is now becoming unstable.

BOC is open for further rate hikes as progress on core inflation stalls

The Bank of Canada's (BOC) policy statement released yesterday showed growing evidence that past rate hikes are dampening economic activity and easing price pressures. A range of indicators suggest that supply and demand in the Canadian economy are nearly balanced. While policymakers expect economic growth to slow, they also believe inflation will move higher in the near term. No progress has yet been achieved on core inflation. In addition, the central bank has been candid in recognizing the lagged impact of previous policy initiatives in dampening economic activity and moderating price pressures. This is the main reason why the BOC continues to be open for further rate hikes. Officials now expect inflation to average 3% in 2024, up from the 2.5% forecast in July. The Board of Directors is concerned about the slow progress in price stabilization and increased inflation risks. They reiterated their readiness to raise rates further if necessary.

[Focus of the Day]

UTC+8 20:15 The European Central Bank announces its interest rate decision

UTC+8 20:30 U.S. Durable Goods Order MoM (Sept)

UTC+8 20:30 U.S. GDP (Q3)

UTC+8 20:30 U.S. PCE (Q3)

UTC+8 20:45 European Central Bank President Christine Lagarde speaks

UTC+8 00:45 Next Day: Bank of England Deputy Governor Cunliffe speaks