Ipek Ozkardeskaya
Swissquote Bank Ltd
US inflation data wasn’t very soothing for investors at yesterday’s release. The stickiness in yesterday’s inflation data wasn’t a surprise and the latest set of jobs and inflation data will unlikely change the Federal Reserve’s (Fed) mind for the November meeting. The Fed is expected to sit on its hands, wait and see. But the first Fed rate cut won’t come so soon, and the Fed will try to capitalize on the ‘higher for longer’ policy to avoid having an accident on what they call ‘the last mile’.
The market reaction to yesterday’s data was very clear, however. The rebound in yields sent the US dollar rallying, and equities tumbling. The EURUSD sank below 1.06, the dollar-yen remains cautiously bid near the 150 level, while Cable – which could’ve rallied above both a short-term and a long-term bearish trend channel, simply couldn’t take the chance after yesterday’s data showed a meagre GDP growth.
The selloff in crude oil extended to below $82pb as the EIA revealed a more than 10-mio barrel build in US crude inventories last week, but buyers gently return into the $80pb psychological level, which is – we know – the Saudi’s limit for eventually taking more action to restrict demand.
Stock investors’ attention shifts to US earnings as three US big banks are expected to reveal their Q3 earnings today.
This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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