Key Takeaways
- Gold prices rose 0.3% to $4,153.66 and Silver gained 1.3% to $61.15 following a significant miss in U.S. nonfarm payrolls for September.
- Market-implied odds for an October Fed rate hike plummeted to 20%, down from 70% just one week ago, as hiring slowed to a mere 29,000 jobs.
- The UK is preparing to impose tariffs on Chinese electric vehicles to comply with EU "Made in Europe" local-content rules and prevent being cut off from European supply chains.
- Chinese brands captured 23% of the UK new-car market in September, with the Jaecoo 7 emerging as the month's best-selling model.
- Taiwan’s overnight interbank rate remained steady at 0.805%, reflecting stable liquidity conditions in the regional market.
US Labor Market Slowdown Reshapes Fed Outlook
Precious metals found strong support Monday as investors recalibrated expectations for the Federal Reserve’s monetary path. Gold (XAU) edged up to $4,153.66 an ounce, while Silver (XAG) outperformed with a 1.3% jump to $61.15. The rally was triggered by Friday’s U.S. employment report, which showed the economy added only 29,000 jobs in September, drastically lower than the 90,000 anticipated by economists.
The weak hiring data has fundamentally shifted market sentiment regarding the Fed's October meeting. Traders are now pricing in only a 20% probability of a rate hike, a sharp reversal from the 70% certainty seen in late September. Investors are now closely monitoring the upcoming release of the Fed’s September meeting minutes for further clues on whether the central bank will pause its tightening cycle.
UK Faces Trade Dilemma Over Chinese EV Influx
The British government is moving toward imposing tariffs on Chinese electric vehicles (EVs) to satisfy demands from Brussels. The European Union has warned that the UK could lose access to critical “Made in Europe” local-content rules unless it aligns its trade policy with the bloc’s 45% levy. Failure to act would risk excluding British-built cars from EU subsidies and public procurement projects.
The move comes as Chinese manufacturers achieve record-breaking success in the British market. Brands like BYD (BYDDF), MG, and Jaecoo accounted for 23% of all UK new-car sales in September. The Jaecoo 7 notably became the UK’s top-selling model for the month, surpassing traditional favorites. However, the proposed tariffs raise fears of retaliation from Beijing, which could target UK-based exporters such as Jaguar Land Rover, owned by Tata Motors (TTM).
Taiwan Interbank Rates Hold Firm
In regional financial markets, the Taiwan overnight interbank rate opened unchanged at 0.805% on Monday. This stability suggests that local liquidity remains balanced despite the broader volatility in global interest rate expectations. The steady rate reflects the Central Bank of the Republic of China (Taiwan)'s current neutral stance as it observes global inflationary trends and the shifting policy landscape in the United States.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.