European Debt And US Debt Will Lead To A New Round Of Interest Rate Cuts In The Global Capital Market.

The world is falling.

Monday to Tuesday trading time, international gold price in

After last Friday's international oil price fall, international oil prices continued to decline on Monday. As of 21 days, New York WTI crude oil closed at 96.92 U.S. dollars / barrel, down 0.75%, a two week low.

Nonferrous Metals of the London Metal Exchange (LME) opened sharply lower on Monday. Copper fell 2.86% in March to close at 7310 U.S. dollars / tonne, while in March zinc and March aluminum fell by more than 2%.

Yesterday, the domestic futures market was relatively strong.

Global stock markets have also been hit.

On Monday, the Dow Jones index fell 2.11%, the Nasdaq composite index plunged 1.92%, and the standard & Poor's 500 index fell 1.86%.

European stock markets were also hit by internal and external attacks. The French CAC40 index and the German DAX 30 index fell by more than 3%.

As of yesterday's close, the Shanghai stock index of China's A shares has been closed for 4 consecutive trading days.

Cause analysis

US deficit reduction did not pass through year-end cash sale

Global debt worries prompted investors to sell risky assets and maintain cash as the most important reason for the fall in the financial market.

The US Congress failed to reach agreement on the deficit reduction agreement on Monday. 23 days ago, the US Congress had to work out a plan to cut us $1 trillion and 200 billion in the next 10 years or else we would automatically reduce our spending.

Previously, S & P has lowered the US rating, and Moodie's rating outlook for the United States is also negative.

The European debt crisis continues to deteriorate, even in the euro area.

Under the pressure of increasing capital to make up for the loss of loans, European banks have begun to reduce lending. This has increased the difficulty of obtaining loans and increased the cost of loans, and has struck a double blow to the economy which is hard to recover.

The market is concerned that the seemingly moderate credit crunch is likely to turn into another credit crisis after the collapse of Lehman brothers in 2008.

The fund and other institutional investors locked in profits before the end of the year was another reason for the massive sell-off of commodities such as gold.

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Policy expectation

A new round of interest rate cuts in the world will start to stimulate the economy

The fragility of the global financial market will give the governments a new round of monetary easing to stimulate the growth of the real economy.

JP Morgan said yesterday that in view of the European debt crisis and tight fiscal policy, it is expected that the Australian Federal Reserve will cut interest rates to 4.25% next month, and will cut interest rates two times in the first quarter of next year.

The Australian Federal Reserve cut interest rates by 25 basis points in November 1st, cutting interest rates for the first time since April 2009.

The Japanese Senate passed the third supplementary budget for fiscal year 21, which was 12 trillion and 100 billion yen in total in 2011.

This is the second largest supplementary budget in Japanese history, second only to the supplementary budget for tackling the global financial crisis in fiscal year 2009.

Singapore's trade ministry said the monetary easing policy is expected to expand in the future due to slower economic growth.

Wang Jun, a futures analyst at the medium term, said that a massive deficit reduction in the US would constrain the economic development of the United States, but provided conditions for the Federal Reserve to take a new round of monetary stimulus measures.

For China, Goldman Sachs economist Song Yu expects CPI to fall below 5% in November due to tighter policy and normal return to video prices and global commodity prices.

This year, the real economy growth rate may still be relatively weak, but overall China's GDP growth will linger around 8%.

In terms of policy, the rapid reduction of CPI will lead to a relaxation of monetary policy. However, as exports and the economy are slowing down, the government will remain cautious and avoid loosening the policy too quickly.

The market expects that China's credit line will be raised to 8 trillion yuan in 2012 (it is expected to achieve 7 trillion and 300 billion to 7 trillion and 400 billion yuan in 2011).

"Monetary easing will become more evident in the first half of next year," said Gao Ting, a China strategist at UBS.