The most recent market concern should be the energy crisis and its exacerbated inflation. The world is responding to environmental pollution to reduce carbon emissions and encourage green energy. However, clean energy power generation such as nuclear, wind, hydro, and solar power is also affected by different factors. This year, it has failed to undertake important tasks or even reduced production capacity. Europe has failed to fulfil the natural gas demand. China also rectified various irregular coal mines and stopped importing from Australia, which caused coal prices to soar. And electricity prices are also not able to keep up with the costs. As a result, electricity rationing appeared everywhere, not only affecting industrial production but even electricity consumption of livelihood is also affected. In the past two months, the price of New York oil has risen from US$62 to US$83, more than a 30% increment. The energy crisis, coupled with supply chain issues, together with the strong rebound in consumer demand after the epidemic, have formed a serious gap. The global economic recovery may be affected, and a high probability that inflation will continue. It is believed that the monetary policies of major economies, led by the United States, will accelerate the tightening.

In October, the growth of non-agricultural vacant in the United States was disappointing, but it probably will not affect the water collection scheme of the Fed. Expected that the reduction of debt purchases will begin in November, and it will be more restrained at the beginning. Most important is the inflation is currently not yet under control. If it keeps rising and the duration is longer than the Bureau's forecast, the pace of water collection and interest rate hikes may accelerate. On the other hand, other developed countries are also facing the threat of inflation. New Zealand has already raised interest rates to suppress prices and the property market. However, the latest third-quarter inflation rate still rose to 4.9%, and it is expected that the central bank will continue to raise interest rates. The Australian dollar central bank also warned that if property prices continue to rise, actions are needed to respond; the market expects the Bank of England to raise interest rates in November. Therefore, the investors have already gradually digested the news that the U.S. is about to collect water. In addition, other countries are also following the same trend of monetary policy normalization. The U.S. dollar took profit after rising to 94.50 Now you should pay attention to the two-support level 93.50 and 93, to buy low.

Non-US currencies are expected to develop individually. The economic recovery in the euro is slow. The central bank should continue to provide support to the economy. The performance of the euro should be relatively backward, and resistance near 1.17 is still big. Japan’s inflation threat is not a huge one. After the new Prime Minister Fumio Kishida came to power, he immediately announced to have a general election on October 31. It is believed that the Liberal Democratic Party will continue to govern and implement economic stimulus plans, monetary policy runs counter to the U.S., recently USD/YEN has continued to rise to 114.50. 115.50/116 should have resistance. It is not suitable to chase the dollar high.

Patrick Law General Manager of Hantec Group