By Alexander Lee
Traders at the New York Stock Exchange [UPI United Press International data photo]
On the 18th (local time), the US Treasury yield continued its upward trend during the morning session of the US stock market. The US 10-year Treasury yield at one point exceeded 4.9%, renewing its highest level since 2007. This is because recently released various US economic data still support the fact that the US economy is strong. September employment report, consumer and producer price indexes, and retail sales data all significantly exceeded expectations, showing that the US economy is stronger than expected. Because of this, there is growing speculation in the market that the Federal Reserve will raise the benchmark interest rate once more, or maintain a high level of interest rates for a long time. The Chicago Mercantile Exchange's FedWatch sees a 6% chance of a Federal Open Market Committee (FOMC) rate hike in November, while the chance of a rate hike in December has increased by more than 10 percentage points to 38% from last week's 28%.
The conflict between Israel and Hamas is escalating. On the previous day, a massive explosion occurred at Al-Ahli Hospital in Gaza Strip. The explosion occurred a few hours before President Biden's visit to Israel. Muslim countries determined the explosion was an act of the Israeli military. Arab media, including Al Jazeera, reported that 'more than 500 casualties occurred due to Israel's attack.' On the other hand, the Israeli military provided drone footage, stating, 'Considering the nature of the explosion, it is far from Israeli weapons. The explosion occurred when the radical armed group Islamic Jihad fired a rocket, passing by Al-Ahli Hospital in Gaza Strip.' President Biden, who visited Israel on the same day, also supported Israel's claim, saying, 'It seems like it was done by a different team, not the Israeli military.' The governments of neighboring countries that had been neutral are now turning their backs on Israel. Jordan canceled the meeting with President Biden, and Saudi Arabia, which was pushing for diplomatic relations with Israel, criticized, 'The Israeli occupation forces committed a crime in the Gaza Strip.'
The possibility of the Israel-Hamas conflict spreading is causing oil prices to rise, and the prices of safe-haven assets such as gold and the dollar are also increasing. On the same day, West Texas Intermediate (WTI) oil at one point rose more than 2% to $89.88 per barrel. The Iranian foreign minister urged member countries of the Organization of Islamic Cooperation (OIC) to sanction Israel and ban oil sales to Israel, which also affected the rise in oil prices. Although Israel's oil imports account for a small proportion of the world's oil supply, and there is almost no import from the Middle East, the market is worried that the conflict will deepen. US crude oil inventory decreased more than expected. US crude oil inventory decreased by 4.49 million barrels compared to the previous week. The expected decrease was 300,000 barrels, but the actual decrease was much more significant. Gold rose by 1.42% during the trading session, and the dollar index also rose by 0.26% to 106.53.
Reporter Alexander Lee alexanderlee_24@newsyn.co.kr
