Dollar falls against won amid concerns over U.S. government shutdown

1) Dollar falls against won amid concerns over U.S. government shutdown
Last night, the dollar-won exchange rate (REGN) closed around 1,400 won, down about 10 won from the previous day due to the weak dollar caused by the expansion of the possibility of a U.S. federal government shutdown. The dollar recently rebounded from its low point, but it was more of a short squeeze. Although the dollar has recently risen on solid U.S. economic indicators and the somewhat hawkish Fed’s stance, dollar weaknessists are likely to use the dollar rebound as an opportunity for a short re-entry from a mid-term perspective. The one-year euro-dollar risk reversals also remain at historical highs, reflecting the market’s confidence in the prospect of a weak dollar

2) Williams, ‘Lower Inflation Risk’ vs. Musalem, ‘Should Be Careful’
“Prices used to be the biggest risk because of some kind of rebalancing between risks, but now both employment and inflation are closer to each other,” New York Fed President John Williams said. “It was reasonable to cut interest rates a little bit and ease some of the tightening intensity.” Meanwhile, St. Louis Fed President Alberto Mussalem left open the possibility of further rate cuts but insisted that policymakers move cautiously as inflation remains above target

3) Goldman to increase share of global stock markets
Global stock markets will continue to rise until the end of the year thanks to the resilient U.S. economy, supportive valuations, and the Fed’s dovish policy shift, Goldman Sachs’ Christian Mueller-Glissmann expects. Goldman raises its stock market outlook for the next three months to “expand its weight,” explaining that stocks generally perform well amid strong policy support during a slowdown in growth in the second half of the economic expansion. “Good corporate earnings growth, the Fed’s easing policy without a recession, and global fiscal policy easing will continue to support stock prices,” they said. “With the risk of a recession fixed, we will start buying low points by the end of the year.”

4) U.S. gold reserves top $1 trillion in market value
The U.S. Treasury Department’s gold reserves exceeded $1 trillion in market value as gold prices topped $3800 an ounce and reached a new all-time high. The U.S. government holds gold directly, and the Fed holds gold certificates equivalent to those held by the Treasury Department and lends dollars to the government. If gold reserves are reevaluated at current prices, about $990 billion could be reflected in Treasury accounts. This is enough to cover half of the $1.973 trillion budget deficit between October last year and August this year

5) Huawei to double production of flagship AI chips next year
Huawei is gearing up to dramatically expand production of cutting-edge artificial intelligence (AI) chips. As Nvidia is mired in a U.S.-China conflict, it is set to acquire customers in China, the world’s largest semiconductor market. Huawei plans to produce around 600,000 of its flagship 910C Ascend chips next year, about double this year’s. If Huawei achieves this goal, it will be a technological breakthrough for China, which is trying to reduce its dependence on foreign chips. This suggests that Huawei and its main partner SMIC have found a way to solve some of the bottlenecks that have hindered China’s self-reliance goals as well as AI