Stocks are bouncing this morning. The inflation problem is still there.
CoreWeave’s earnings have given buyers a reason to move back into beaten-down AI and semiconductor shares, with Nasdaq 100 futures leading the recovery. At the same time, the U.S. dollar is higher across the major currencies after yesterday’s hotter-than-expected CPI report and another round of hawkish Fed commentary.
That leaves traders balancing two different stories. The AI spending outlook is offering some reassurance for technology stocks. The inflation and interest-rate outlook is offering considerably less reassurance for the broader economy.
In the morning video above, I take a look at the three major currency pairs—EURUSD, USDJPY and GBPUSD—from a technical perspective. For each pair, I outline the bias, the risk-defining levels and the targets that would give either the buyers or sellers more control.
CPI keeps the pressure on the Fed
Yesterday’s CPI report was disturbing because the underlying inflation picture failed to improve as much as hoped. Headline prices rose 0.4% versus 0.3% expected, while core prices increased 0.3% versus 0.2% expected. It was the third consecutive rounded monthly core reading of 0.3%.
Energy inflation slowed from September, but that did not produce a corresponding slowdown in core inflation. Shelter and other service prices remained part of the problem. My Americas FX wrap from yesterday reviews the report and the market reaction.
The message from Fed officials is becoming harder to ignore:
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Christopher Waller, Federal Reserve governor: A 50-basis-point increase is on the table. His comments before CPI tied consideration of a larger move to another core reading of 0.3% or higher.
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Lorie Logan, Dallas Fed president: At least two more quarter-point increases are needed, with scope to move more quickly.
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Austan Goolsbee, Chicago Fed president: Inflation is “borderline disturbing,” with service inflation failing to come down.
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Anna Paulson, Philadelphia Fed president: Further gradual increases are appropriate, but a worsening inflation outlook could require more aggressive action. She sees a stronger-than-expected economy and a robust, stable labor market.
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Michelle Bowman, Federal Reserve governor: Inflation’s failure to trend lower should give policymakers pause. The question is what pace and timeline are needed to address it.
My read is that the debate is shifting toward how quickly the Fed needs to tighten further. A half-point increase is a possibility, not a decision. But it gives traders another risk to account for. The market is pricing in a 13% chance for a 50 BP hike.
Treasury market closed after a sharp repricing
The U.S. cash Treasury market is closed today for Veterans Day. Yesterday’s levels therefore provide the reference point:
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2-year Treasury yield: Rose around 20 basis points.
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10-year Treasury yield: Closed at 5.00%, compared with a low of 4.817% last Thursday.
That is an approximately 18.3-basis-point climb in the 10-year yield from Thursday’s low.
The 2-year move is particularly relevant to the Fed outlook because that maturity is sensitive to expectations for short-term policy rates. The 10-year matters more broadly for mortgages, corporate borrowing and equity valuations.
Today’s stock rebound will have to wait until tomorrow for the next full cash Treasury-market response. The holiday does not remove the interest-rate headwind.
Stocks: CoreWeave gives the AI trade a lift
The latest futures snapshot implies:
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Dow industrial average futures: Up 88 points.
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S&P 500 futures: Up 71 points.
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Nasdaq 100 futures: Up 555 points.
CoreWeave jumped more than 16% in premarket trading after strong results and a forecast for adjusted profitability in the first half of 2028. That offered some reassurance about its financial outlook and the cost of expanding AI infrastructure.
Nvidia rebounded about 4.4% following two sharply lower sessions, while Micron and Marvell also advanced. The concentration of gains in AI and semiconductor shares helps explain why the Nasdaq is outperforming the Dow.
My read: buyers have found a reason to step back in after the selling. That is encouraging for the AI trade, but one earnings report does not resolve the tension between strong investment demand and a higher cost of financing.
The next test is whether the gains hold once regular trading gets underway.
Dollar higher across the board
The dollar is stronger against every major currency in the supplied snapshot. Its largest gain is against the Swiss franc, while the Australian dollar is holding up best with only a modest decline against the greenback.
From the dollar’s perspective:
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EURUSD: 1.1138, down 0.22%.
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GBPUSD: 1.3313, down 0.21%.
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USDJPY: 159.16, up 0.27%.
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USDCHF: 0.8292, up 0.50%.
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USDCAD: 1.4231, up 0.30%.
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AUDUSD: 0.6862, down 0.04%.
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NZDUSD: 0.5586, down 0.29%.
The dollar’s ability to hold its gains while technology shares rebound is worth watching. So far, improved equity sentiment has not been enough to reverse the currency market’s response to inflation and the Fed.
Currency ranges: Room remains to extend
Using the displayed session highs and lows and the 22-day average ranges:
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EURUSD: 1.1131–1.1170 — 39 pips, approximately 57% of its 68-pip average.
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GBPUSD: 1.3308–1.3358 — 50 pips, approximately 64% of its 78-pip average.
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USDJPY: 158.67–159.18 — 51 pips, approximately 58% of its 88-pip average.
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USDCHF: 0.8249–0.8296 — 47 pips, approximately 80% of its 59-pip average.
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USDCAD: 1.4182–1.4233 — 51 pips, approximately 74% of its 69-pip average.
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AUDUSD: 0.6862–0.6888 — 26 pips, approximately 49% of its 53-pip average.
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NZDUSD: 0.5584–0.5614 — 30 pips, approximately 59% of its 51-pip average.
AUDUSD has completed the smallest share of its normal range. USDCHF has used the most, although it remains below its average.
There is still room for an extension in the major pairs if prices break their session extremes. The averages provide context; they do not require prices to travel farther or prevent them from exceeding a normal day’s range.
Crude rebounds as diplomacy faces obstacles
At approximately 7:25 AM ET, WTI crude oil was trading at $87.28, up $1.24, or 1.44%. The session range was $85.81–$87.39, leaving the price near its high.
The Middle East remains central to the outlook. Qatar said it had secured at least two weeks for diplomatic efforts between the U.S. and Iran, but significant differences remain. Iranian officials have also pushed back against reports of negotiations and concessions.
As InvestingLive’s oil update explains, the absence of a concrete breakthrough is challenging expectations for a quick agreement. That provides a backdrop for today’s rebound.
On Russia and Ukraine, trilateral talks involving the U.S. have concluded, with further updates awaited on whether substantive progress was made. The talks keep diplomacy in focus, but they do not yet establish a settlement or a change in energy supply.
For traders, the distinction is between encouraging diplomatic headlines and an agreement that changes actual supply conditions. Until those align, oil remains vulnerable to abrupt headline-driven moves.
Metals and Bitcoin recover
The supplied snapshot shows:
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Spot gold: Around $4,042.92, up 0.26%.
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Silver: $52.81, up 2.48%.
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Copper futures: $6.2685, up 0.85%.
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Bitcoin: $73,901, up 0.28%.
Silver has the strongest percentage recovery in that group. Gold’s more modest gain comes with the dollar still firm and yesterday’s Treasury selloff fresh in traders’ minds.
What comes next?
The U.S. cash bond market is closed for Veterans Day, while U.S. equities remain open.
The next inflation release highlighted on the calendar is U.S. PPI on Friday, November 13, at 8:30 AM ET. After yesterday’s CPI surprise, traders will look for evidence of persistent pipeline price pressures and details that could influence estimates for the Fed’s preferred PCE inflation measure.
Today, equity follow-through, currency breaks and geopolitical headlines will help determine whether the morning moves can extend.
EURUSD: Sellers press toward the session low
EURUSD is trading at 1.1138, seven pips above the session low at 1.1131. Sellers have the stronger hand within today’s range.
A move below 1.1131 that can stay below would extend the downside and give sellers more control. A break that quickly fails would be a warning that the sellers had their shot and could not sustain the move.
The session high at 1.1170 is the supplied upside reference. The video’s technical levels will define the closer risk between those extremes.
USDJPY: Buyers test the session high
USDJPY is at 159.16, just below the session high at 159.18. The price moved above the ubiquitous 200 day MA at 158.69 yesterday and is now breaking above the 100 day MA at 159.00 and trading at the highest level since September 2. The 160.00 level is a broader psychological reference.
GBPUSD: Sellers hold the advantage near the lows
GBPUSD is trading at 1.3313, just five pips above its 1.3308 session low.
The price is testing a swing area between 1.3298 to 1.3310. Yesterday the price tested the high of that range and found willing buyers. A break below the 1.3298 should see more selling momentum. Hold again, and the level adds to it’s attractiveness as a bounce point.
Good fortune with your trading.
This article was written by Greg Michalowski at investinglive.com.