OPEC cuts global oil demand growth forecasts for a fourth monthThe importance of market timing: MSTR stock case studyUS October NFIB small business optimism index 93.7 vs 91.5 priorGermany November ZEW survey current conditions -91.4 vs -85.9 expectedBOE’s Pill: Further rate cuts likely to be a gradual processECB’s Rehn: Rate cuts will depend on our overall assessment at each meetingGerman lawmakers reportedly near agreement for early election in FebruaryECB’s Rehn: The direction of our policy moves is clearEuropean indices surrender yesterday’s gains at the open todayGold retreat continues in drop below $2,600What are the main events for today?Eurostoxx futures -1.0% in early European tradingGermany October final CPI +2.0% vs +2.0% y/y prelimUK September ILO unemployment rate 4.3% vs 4.1% expectedBitcoin closes in on $90,000 as the post-election surge continues to play outCable eyes key support level as dollar momentum continues to runChinese yuan falls further to lowest in over three monthsFX option expiries for 12 November 10am New York cutUK labour market data on the agenda today
Markets:
USD leads, AUD lags on the dayEuropean equities lower;
S&P 500 futures down 0.12%US 10-year yields up 3 bps to 4.363%
Gold down 0.53% to $2,605WTI
crude up 0.68% to $68.49Bitcoin down 2.05% to $86,900
It’s been
a rather slow session as the lack of key economic releases and limited news flow
kept the price action pretty rangebound.The only notable release today was the UK labour market report which was mostly mixed although it leant more on the dovish side. Nevertheless, it doesn’t change anything for the market or the BoE.
We are now approching the US CPI report due tomorrow and that’s going to be an important event. At the latest
Fed’s decision, Fed Chair Powell said that they expect bumps on inflation and
that one or two bad data months on inflation won’t change the process. This
keeps the 25 bps cut in December in place even if we get higher inflation
readings.
The market though
is forward-looking, and the rise in Treasury yields showed that the market sees
risks to the inflation outlook. Moreover, the red sweep could increase those
fears if the progress on inflation stalls, or worse, reverses.
The US Dollar might benefit from a hot CPI, while bonds and gold could see some more weakness. Risk assets like stocks and bitcoin though might shrug off a higher than expected reading as long as the Fed doesn’t change its reaction function.
This article was written by Giuseppe Dellamotta at www.forexlive.com.
