The top three officials of the Federal Reserve are suppressing expectations of interest rate cuts, causing a "flash drop" in US bonds. Super central banks have seen a significant increase this week, while the upward momentum of US stocks has slowed down, but still maintained a seven-week streak of gains.

Just two days after the Federal Reserve released a dovish signal, the "third in command" of the Fed and President of the New York Fed, Williams, "hawkishly" stated that it is "too early" to consider an interest rate cut in March next year. He directly contradicted Fed Chairman Powell, saying "we are not really discussing a rate cut" and implied that the market's reaction may be excessive, suggesting that the market's reaction may be stronger than what the Fed itself predicted.

Williams believes that there needs to be preparation for further tightening of monetary policy and that the Fed must be prepared to raise interest rates if necessary. He also believes that the Fed should focus on its objectives rather than market views. Journalist Nick Timiraos, known as the "New Fed News Agency," commented that Williams' statement clearly countered the atmosphere of rate cuts at Powell's press conference on Wednesday.

Williams poured cold water on the prospect of a rate cut by the Fed early next year. After his speech, US Treasury bond prices "plunged" intraday, with yields reaching a daily high. The yield on the two-year US Treasury bond, which is sensitive to interest rates, rebounded more than 10 basis points from its intraday low, and the yield on the benchmark 10-year US Treasury bond briefly approached the 4.0% level. The US dollar index rapidly increased, reaching a daily high and continuing to move away from the four-month low set on Thursday. Major US stock indexes partially retreated, with the S&P and Dow opening lower.

However, the impact of Williams' suppression of rate cut expectations did not last. After the US stock market opened, the yield on the two-year US Treasury bond gave up most of its gains, and the yield on the ten-year bond returned to a downward trend, approaching the four-month low set after breaking through the 4.0% level on Thursday. The increase in the US dollar narrowed, and the Dow rebounded during the trading session, with the S&P briefly turning positive. Blue-chip technology stocks such as Microsoft rebounded, and chip stocks continued to rise, supporting the overall market recovery.

Subsequently, two other Fed officials, Bostic and Bullard, also poured cold water on expectations of a rate cut in the near future. Bostic stated that he expects two rate cuts next year, possibly starting in the third quarter, while Bullard stated that he expects rates to be lower next year, but not significantly. Their speeches did not change the divergent trends in short- and long-term US Treasury yields, and the Dow and Nasdaq ultimately maintained their upward momentum. However, market expectations for a rate cut in March "cooled down," with the probability of a rate cut falling to about 66%.

Overall, the stock and bond frenzy triggered by the Fed's hint of multiple rate cuts next year eased by Friday. However, due to the sharp rise in the previous two days, stocks and bonds rose together for the entire week, with major stock indexes continuing their upward trend for over a month. US Treasury bond prices rebounded significantly, and yields fell sharply after rising last week. Some commentators pointed out that before the speeches of the three Fed officials, the market had expected a total of 168 basis points in rate cuts by the Fed next year, equivalent to nearly seven 25 basis point rate cuts. Before the speech of the three key figures of the Federal Reserve, the market had expected nearly seven interest rate cuts by the Fed next year.

In the foreign exchange market, the expectation of a dovish turn by the Federal Reserve put pressure on the US dollar index. Despite a rebound on Friday, the dollar failed to reverse its downward trend for the whole week. Non-US currencies fell during Friday's trading session, with the euro and pound retreating from the highs reached after the European Central Bank and the Bank of England dampened expectations of interest rate cuts on Thursday. Offshore renminbi briefly rose above 7.10 for the first time in six months before falling nearly 400 points, but these non-US currencies all posted cumulative gains for the week due to the weakening of the US dollar in the first two days.

As the US dollar rebounded, both gold and international crude oil fell during intraday trading. Danish shipping giant Maersk announced a suspension of all container shipping through the Red Sea, supporting a majority of the intraday decline in oil prices. Despite the retreat in gold and oil prices for the week, they both maintained an overall upward trend due to the significant gains on Thursday. Crude oil ended its longest weekly losing streak in four years, thanks to the surge in expectations of a dovish turn by the Federal Reserve after its meeting and the weakening of the US dollar. Additionally, the International Energy Agency (IEA) raised its oil demand forecast for next year, and concerns over the security of Middle East oil supply were raised by the attack on an oil tanker in the Red Sea by Houthi rebels in Yemen, which also contributed to the rebound in oil prices. From this perspective, the Federal Reserve achieved a reversal in the weekly decline of oil prices that even OPEC+ countries' additional production cuts failed to achieve.

The Nasdaq Composite Index posted its seventh consecutive weekly gain, while the S&P 500 had its longest weekly gain since 2017. Chip stocks reached a new high, while Chinese concept stocks ended their four-day winning streak.

At the opening, only the Nasdaq Composite Index among the three major US stock indices rose, and it maintained its upward trend for the whole day, with only a short-term decline during midday trading. The Dow Jones Industrial Average fell from its intraday historical high, dropping more than 150 points and over 0.4% in early trading. It briefly turned lower after midday trading, but rebounded in the final hour to lock in gains. The S&P 500 Index turned slightly higher in early trading, but fell more than 0.3% when it hit a daily low during midday trading. It also rebounded in the final hour.

In the end, the three major indices failed to collectively close higher. The S&P 500 fell 0.01% to 4,719.19 points, still close to the closing high since January 12 last year, which was set for two consecutive days until Thursday. The Nasdaq Composite Index rose 0.35% to 14,813.92 points, reaching a new high since January 14 last year for three consecutive days. The Dow Jones Industrial Average rose 0.15% to 37,305.16 points, setting a new closing high for three consecutive days.

Among the major US stock indices on Friday, the Nasdaq Composite Index outperformed the Dow Jones Industrial Average and the S&P 500, while small-cap stocks performed the worst.

The Russell 2000, which is dominated by value stocks, initially turned lower and closed down 0.77%, falling from the high reached for two consecutive days since April 20 last year. The Nasdaq 100 Index, which is dominated by technology stocks, rose 0.52% and set a new all-time high. The Nasdaq Technology Market Cap Weighted Index (NDXTMC), which measures the performance of technology stocks in the Nasdaq 100 Index, rose 0.78% and posted a cumulative gain of 3.44% for the week, rebounding after a five-day winning streak ended on Thursday. Major US stock indices continued to rise collectively this week. The S&P 500 rose 2.49%, the Dow Jones Industrial Average rose 2.92%, the Nasdaq Composite rose 2.85%, and the Nasdaq 100 rose 3.35%. They have all risen for seven consecutive weeks, with the Dow Jones on track to achieve its longest continuous rise since 2019, and other indices set to achieve their longest weekly rise since 2017. The Russell 2000 rose 5.55% and has risen for five consecutive weeks.

Several leading technology stocks that fell on Thursday rebounded. Tesla, which surged nearly 5% on Thursday, closed up nearly 1% and rose nearly 4% for the week. Among the six major FAANMG technology stocks, Microsoft, which fell more than 2% on Thursday, closed up 1.3%; Amazon, which fell nearly 1% on Thursday, closed up 1.7%; Meta, the parent company of Facebook, which fell nearly 0.5% on Thursday, closed up more than 0.5%; Netflix, which fell more than 2% on Thursday, closed up nearly 0.5%; Alphabet, the parent company of Google, closed up 0.5%, erasing its losses from Thursday; and Apple, which barely closed up on Thursday, fell nearly 0.3%.

Most of these technology stocks rose this week, with Netflix up 4%, Amazon up 1.7%, Apple up nearly 1%, Meta up nearly 0.7%, and Alphabet down nearly 1.8% and Microsoft down 0.6%.

Chip stocks have risen for seven consecutive days. The Philadelphia Semiconductor Index and the Semiconductor Industry ETF SOXX both rose more than 1% in early trading, closing up nearly 0.5% and 0.4% respectively. Both indices have set new historical highs for three consecutive days and have risen by about 9.1% this week. Among individual stocks, Broadcom rose more than 2% and rose nearly 20% for the week, achieving its largest weekly gain since its listing. This was partly due to a 9% surge on Monday after receiving a buy rating from Citigroup, and it has continued to rise since then. Nvidia and Qualcomm both rose more than 1%. Among the three chip stocks that were upgraded by Bank of America, Intel rose more than 2% and AMD rose 0.8%, while Micron Technology initially rose nearly 1% but then fell, closing down nearly 1%.

Overall, AI concept stocks fell. C3.ai (AI) fell 0.6% after initially rising, SoundHound.ai (SOUN) fell more than 2%, Palantir (PLTR) fell less than 0.1%, and Adobe (ADBE), which fell more than 6% on Thursday after announcing weaker guidance for next year, almost closed flat after falling during midday trading. BigBear.ai (BBAI) closed up more than 2%.

Some popular Chinese concept stocks that have been rising for consecutive days experienced a partial decline. The Nasdaq Golden Dragon China Index (HXC) initially rose more than 1% but then fell during midday trading, closing down more than 0.3% and deviating from the high point since December 1st, which was set during a four-day consecutive rise. It rose nearly 2% for the week. The Chinese concept ETFs KWEB and CQQQ closed flat and fell more than 1% respectively. New energy vehicle companies had mixed performance, with NIO up more than 1%, XPeng down more than 7%, and Li Auto initially rising nearly 3% but then falling, closing down nearly 0.4%. In other stocks, despite Dong Yuhui's denial of joining JD.com, JD.com still rose more than 4% at the close. Daquan New Energy rose 3%, Alibaba and JA Solar rose more than 2%. After announcing further actions to combat potential illegal short selling, Faraday Future rose nearly 2%. Baidu and Pinduoduo rose more than 1%, Tencent Fan Dan rose 0.1%, while NetEase fell more than 1% and Bilibili fell 0.4%. Previously, it was reported that Gaotu Jia Pin's Douyin official account gained more than 990,000 followers in four days, and Gaotu Education's stock price rose nearly 30% on Thursday, but it fell nearly 9% in early trading and closed down nearly 3%.

Among the key stocks, after shipping giant Maersk requested that all its container ships suspend navigation in the Red Sea, several European and American freighter stocks rose. ZIM Integrated Shipping Services (ZIM) rose 18%. Media reports that DocuSign (DOCU), which provides electronic signature solutions, rose 12.5% after it was reported to be studying the sale with several advisors. General Motors, which laid off more than 1,300 people at two factories in Michigan, fell 1.4% after an initial rise.

In Europe, the preliminary composite PMI for the eurozone in December shrank for the seventh consecutive month, and the composite PMI for Germany, the largest economy in the region, and France, the second largest economy, both fell more than expected, sounding the alarm for a recession. François Villeroy de Galhau, the governor of the Bank of France, hinted that interest rate cuts would not come soon. However, Wall Street still expects interest rate cuts in the spring of next year. Barclays expects the European Central Bank to cut interest rates by 25 basis points in April next year, and then cut interest rates at every meeting until January the following year. The pan-European stock index fell at midday but managed to erase its losses by the close.

The STOXX 600 index in Europe rose slightly, hitting a closing high since February 2 last year, which was set on Monday. Major European stock indexes performed differently on Friday, with the UK stock market falling after two consecutive rises, the Spanish stock market falling after rebounding on Thursday, and the German stock market almost flat after three consecutive declines. The French and Italian stock markets rose for two consecutive days.

In various sectors, basic resources and technology stocks in the mining sector rose more than 1%, while telecommunications and real estate fell nearly 1%. Among individual stocks, London-listed GlaxoSmithKline fell 2.9% after the EU regulatory agency launched an investigation into its leukemia drug, dragging down the healthcare sector by about 0.5%. The UK stock market performed the worst among European countries. Swedish technology company Sectra, which saw a sharp increase of more than 40% in sales in the second quarter, reaching a new quarterly high, surged 8.3%, leading the STOXX 600 constituents. Maersk, listed in Denmark, rose nearly 7.9%, second only to Sectra in terms of gains among constituents.

This week, the STOXX 600 index rose for the fifth consecutive week. The stock indexes of various countries failed to continue their collective gains. The Spanish stock market rose for seven consecutive weeks, the French stock market rose for five consecutive weeks, and the UK stock market rose for three consecutive weeks. The German stock market, which rose for six consecutive weeks, fell slightly, while the Italian stock market, which rose for two consecutive weeks, fell. In various sectors, supported by the decline in European bond yields, the interest rate-sensitive real estate sector has risen by more than 5%, performing the best. Some have benefited from the Friday rally, while the technology sector has risen by nearly 3%, and the basic resources sector, which fell more than 3% last week, has risen by nearly 2%. On the other hand, the telecommunications sector has fallen more than 3%, and the oil and gas sector has fallen more than 1%, continuing to decline against the market trend.

After the release of the Eurozone PMI, which implies the danger of an economic recession, European government bond prices further increased and yields continued to decline. Although European Central Bank President Lagarde stated after the meeting on Thursday that there was no discussion of interest rate cuts, the current money market still expects an 80% probability of the European Central Bank's first interest rate cut in March next year. Derivative contract prices indicate that the market expects a total interest rate cut of 155 basis points by the European Central Bank next year, an increase of about 15 basis points from the level predicted before the announcement of the Federal Reserve's decision on Wednesday.

At the end of the bond market, the yield on 10-year UK benchmark government bonds closed at 3.68%, a decrease of about 10 basis points during the day. It once fell below 3.67% during the day, refreshing a seven-month low for two consecutive days. The yield on 2-year UK government bonds closed at 4.24%, a decrease of about 5 basis points during the day, but it has not approached the half-year low of 4.21% set on Thursday. The yield on 10-year benchmark German government bonds closed at 2.01%, a decrease of 9 basis points during the day. It once fell below 2.01% during the day, refreshing a low for nearly nine months for two consecutive days. The yield on 2-year German government bonds closed at 2.49%, a decrease of 4 basis points during the day, continuing to refresh an eight-month low.

This week, European bond yields collectively declined. Short-term bond yields, which rebounded last week, fell back, and long-term bond yields fell for three consecutive weeks, with a much larger decline than last week. The decline in UK bond yields was the largest, reflecting the impact of data such as slowing wage growth that strengthened expectations of interest rate cuts. The yield on 10-year UK government bonds, which fell by about 9 basis points last week, has fallen by a cumulative 36 basis points this week, and the yield on 2-year UK government bonds has fallen by about 31 basis points. The yield on 10-year German government bonds, which fell by about 9 basis points last week, has fallen by a cumulative 26 basis points this week, and the yield on 2-year German government bonds has fallen by about 19 basis points.

The yield on 10-year US benchmark government bonds fell below 3.90% during European stock trading, refreshing the intraday low, approaching the low of 3.89% set on Thursday, the lowest since August 10th. It fell by nearly 3 basis points during the day. After the speech by Williams, the third in command of the Federal Reserve, before the US stock market opened, the decline was reversed and it briefly approached 3.98%, refreshing the intraday high. It rose by 5 basis points during the day and rebounded by nearly 8 basis points from the intraday low. The US stock market fell to around 3.90% in early trading, approaching a four-month low, and rebounded slightly at noon. At the end of the bond market, it was about 3.91%, a decrease of about 1 basis point during the day, a decrease for four consecutive days, and a cumulative decrease of about 32 basis points this week, after a slight rebound last week.

After the 10-year US Treasury yield, the 30-year US Treasury yield also fell below 4.0% for the first time in four months.

After the speeches of the top three officials of the Federal Reserve, the US dollar index rose and moved away from its four-month low. The offshore renminbi rose above 7.10 to reach a six-month high before falling back. It still rose throughout the week.

The ICE US Dollar Index (DXY), which tracks the exchange rates of the US dollar against six major currencies, fell below 101.90 during the Asian session, with a decline of more than 0.1% during the day. After a brief rise in the European stock market, it maintained its upward trend. After the speech by Williams of the Federal Reserve before the US stock market, it rose and approached 102.60, but then fell back. In the early trading of the US stock market, it fell below 102.40, and the increase in the midday trading of the US stock market expanded, rising above 102.60 to reach a daily high of 102.643, an increase of nearly 0.7% during the day, breaking away from the low of 101.80 on Thursday, August 4.

By the close of the US stock market on Friday, the US dollar index was above 102.50, up nearly 0.6% during the day, and down 1.4% for the week. The Bloomberg Dollar Spot Index, which tracks the exchange rates of the US dollar against ten other currencies, rose nearly 0.4%, down about 1.2% for the week. Both the US dollar index and the Bloomberg Dollar Spot Index rebounded after three consecutive days of decline, but both fell back after stopping the three-week decline last week.

Among non-US currencies, the euro against the US dollar accelerated its decline during the European and American trading sessions. The US stock market fell below 1.0890 during the midday trading, with a decline of more than 0.9% during the day, falling from the high point reached on November 29 when it rose above 1.1000. At the close of the US stock market, it was slightly below 1.900, up about 1.2% for the week. The British pound against the US dollar fell below 1.2670 during the midday trading of the US stock market, with a decline of nearly 0.8% during the day, falling from the high point reached on August 22 when it approached 1.2800. At the close of the US stock market, it was above 1.2670, up about 1% for the week. The Japanese yen, which has risen for three consecutive days, fell back today. The USD/JPY exchange rate turned downward multiple times during the day, with the US stock market falling below 141.50 at the opening, hitting a new daily low. However, it rebounded during the afternoon session and closed above 142.20. The intraday increase was more than 0.2%, but it did not approach the low of 141.00 to 140.95 set on July 31, the lowest level since then.

The Chinese yuan, which has been rising for several days, also experienced a decline during the day. The onshore yuan (CNY) against the US dollar initially rose for the second consecutive day during the European stock market session, approaching the six-month high set on Thursday. However, it turned downward before the US stock market opened.

The offshore yuan (CNH) against the US dollar rose to 7.0976 during the European stock market session, breaking through 7.10 for the first time since June 2, and hitting a new six-month high for two consecutive days. It rose by 260 points during the day but then continued to fall. Before the US stock market opened, it fell to 7.1371, hitting a new daily low. It fell 395 points from the high of the day and 135 points intraday. At 5:59 am on December 16th Beijing time, the offshore yuan against the US dollar was reported at 7.1346, down 110 points from the end of Thursday's New York session, ending the three-day rise. It still rose by 526 points this week after falling more than 600 points last week, marking the fourth consecutive weekly increase in the past five weeks.

Bitcoin (BTC) rose above $43,200 in the early Asian session, hitting a new daily high. However, it fell continuously after the European stock market opened, with the US stock market falling below $42,000 to around $41,800 at the opening, a drop of nearly $1,500 or more than 3% from the high of the day. It rebounded to above $42,000 during the afternoon session and closed above $42,200. It fell nearly 2% in the past 24 hours and more than 5% in the past seven days.

Maersk Line has temporarily suspended shipping in the Red Sea. Crude oil prices erased most of their intraday losses and closed lower than the previous week's high, ending the longest seven-week decline in four years.

International crude oil futures fell during the day, and after falling before the US stock market opened, WTI crude oil fell to $70.3, a drop of nearly 1.8% during the day. Brent crude oil fell to $75.29, a drop of over 1.7% during the day. Both rebounded during the afternoon session.

In the end, WTI January crude oil futures fell 0.21% to $71.43 per barrel, while Brent February crude oil futures fell 0.08% to $76.55 per barrel. Both fell from the high of last Tuesday, which saw a significant increase in prices.

This week, US oil rose by 0.28% and Brent oil rose by 0.94%, ending the seven-week decline, the longest since 2018. This was mainly due to a more than 3% increase on Thursday, the largest daily increase since OPEC+ announced additional production cuts on November 17. Except for the first two weeks after the Israel-Palestine conflict broke out, this week marked the third consecutive weekly increase in crude oil prices.

Gasoline and natural gas futures in the United States rose together. NYMEX January gasoline futures closed up 0.9% at $2.137 per gallon, reaching a high since November 30th and rising nearly 4.3% for the week after seven weeks of decline. NYMEX January natural gas futures rose 4.14% to $2.4910 per million British thermal units, reaching a one-week high, but still below the level of last Friday. Natural gas fell nearly 6% and 5% in the first two days of the week due to warm winter weather forecasts, but rebounded afterwards. The weekly decline was far less than the over 8% decline of the previous week.

London aluminum rose for the fourth consecutive week, while London zinc rose more than 5% for the week. Gold fell during the trading session, bidding farewell to the high of the week, but is expected to rebound next week.

Most London base metal futures continued to rise on Friday. London aluminum, London zinc, and London nickel all rose more than 1%. London aluminum rose for the fourth consecutive day to a high since late November, while London zinc and London nickel rose for the second consecutive day, reaching new highs since the end of November and mid-November, respectively. London lead also rose for the second consecutive day, reaching a new high in nearly two weeks. However, London copper, which rose more than 2% in a single day for the first time in five months on Thursday, fell slightly, temporarily bidding farewell to the high since early December. London tin, which rose for three consecutive days, fell from a high in nearly two months.

Base metals rose for the week, with London zinc and London aluminum leading the gains, rising more than 5%. London lead, which rose more than 2%, ended four weeks of decline, while London copper rose more than 1% after three weeks of consecutive gains. London nickel rebounded more than 2% after last week's decline, and London tin, which rose alone last week, rose more than 2% for two consecutive weeks.

New York gold futures, which have been rising for several days, fell during the trading session. It briefly approached $2060 during the European stock market session, rising more than 0.7% intraday. However, it fell during the pre-market trading session of US stocks and continued to decline after the midday session.

Spot gold also rose during the European stock market session, reaching a high of $2045, up more than 0.4% intraday. However, it fell before the US stock market session and briefly fell below $2016 during the midday session, down 1% intraday, deviating from the high of $2048 reached on December 4th.

Finally, COMEX February gold futures closed down 0.45% at $2035.7 per ounce, falling from the closing high since last Thursday, when it broke through $2040.

Gold rose 1.05% for the week, rebounding after three weeks of decline. It rose for the eighth week out of the past ten weeks, mainly due to a more than 2% increase in a single day after the Federal Reserve meeting on Thursday, marking the largest daily gain since October 13th.