U.S. short-term interest rate traders increasingly believe that the Fed will start raising interest rates in June next year, but they suspect that the rate hike may not be as large as policymakers have said. On Friday, the interest rate swap price associated with the Fed meeting date reflects the probability of a 22 basis point rate hike in June as high as 87%. A week ago, they predicted that the Fed will raise interest rates by 62%, a rate of 16 basis points. At the same time, the slope of the Fed's interest rate path predicted by the market continues to decline. Its peak indicates that interest rates will be raised five to six times by the end of 2025, and the interest rate level is more than 100 basis points lower than the Fed officials' forecast.

The United States and the European Union have reached a "truce" on steel and aluminum trade, which will enable both sides to withdraw their annual tariff measures on exports of more than 10 billion U.S. dollars. US officials said on the sidelines of the G20 summit in Rome that negotiators had reached an agreement on Saturday. As transatlantic allies, the United States and the European Union have previously sought to reach an agreement before doubling the EU’s retaliatory tariffs on December 1. Two people familiar with the matter said before the official announcement that the 25% tariff will apply to more than 3.3 million tons of products exported from the EU.

A high-level US official told reporters in Rome that the US is discussing with other big energy-consuming countries how to urge the Organization of Petroleum Exporting Countries (OPEC)+ to increase production to solve the current energy shortage. The official said that leaders will also discuss how OPEC+, which has 23 member states, including Russia, can respond if they do not act. But he said he would not guess at random which options are available. In addition, Bloomberg earlier quoted a number of diplomats and industry insiders to report, and is currently launching a drastic action to persuade OPEC+ to increase production.

Technical experts from the OPEC+ Alliance lowered their expectations of how tight global oil market supply and demand this quarter will be. A week later, the ministers of the organization will meet to decide production policy. The representative of the organization revealed that the joint technical committee of the OPEC+ alliance concluded on Thursday that the global oil supply gap in the fourth quarter will only be an average of 300,000 barrels per day. Delegates said that this was far below the 1.1 million barrels per day shortfall originally submitted, and the committee revised its views based on the latest demand data.

US consumer confidence fell in October compared with the previous month, and Americans’ expectations for inflation in the next year continued to rise. Data released on Friday showed that the final value of the University of Michigan Consumer Confidence Index fell from 72.8 in September to 71.7, and it was 71.4 in early October. Richard Curtin, who is in charge of the investigation, said in a statement that “rising inflation and declining confidence in the government’s economic policies have offset the positive impact of rising income expectations and mitigation of the epidemic”

The pace of inflation in the Eurozone in October exceeded expectations and reached the highest level since 2008, which once again exceeded market expectations. This may cause investors to question whether price increases are temporary. According to data released by Eurostat on Friday, consumer prices rose 4.1% in October, compared to an estimated 3.7% increase. An indicator excluding volatile food and energy prices rose to 2.1% on Friday, a level not seen in nearly two decades.

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