Headlines:
- Gold shrugs off hot inflation data as market focus may be shifting to growth concerns
- How have interest rate expectations changed after this week’s events?
- Chart of the day: 10-year Treasury yields hit reverse this week but the real test is still ahead
- Eurozone September final CPI +3.8% vs +3.8% y/y prelim
Markets:
- NZD leads, USD and JPY lag on the day
- 10-year Treasury yields up 2.5 bps to 5.11%
- WTI crude oil -0.3% to $96.20
- Gold up 0.2% to $4,176
- European stocks higher; S&P 500 futures +0.1%
- Bitcoin up 0.7% to $82,577
It was a quieter session as broader markets continue to digest the calmer mood as we look toward the final stages this week.
The selloff in the bond market had stalled in recent days despite hotter-than-expected US inflation data, helping investors to afford a breather. And that relief is continuing to today for the most part.
We are seeing 10-year Treasury yields nudge back up a little to 5.11% but so far, the broader market reaction is still siding with the calmer side. That as 10-year yields are still poised for back-to-back weekly declines for the first time since June.
The dollar is struggling once again as we get into the final stretch of the week, with EUR/USD up 0.3% to 1.1256 in hitting a one-week high. USD/JPY is slightly calmer as it keeps little changed near 158.00 but the dollar is faltering elsewhere with AUD/USD up 0.6% to 0.6960 and USD/CAD down 0.3% to 1.4147 on the day.
In the equities space, European stocks are building on the better mood still as regional indices are posting modest gains today. The DAX is up 0.9% with the CAC 40 up just 0.3% as French stocks are not as enthusiastic amid fiscal risks back home. Still, both indices are poised to post their fifth weekly gain in six weeks.
As for US futures, the mood music continues to be rather dour for tech shares. S&P 500 futures are up 0.1% but Nasdaq futures are down 0.2%, as the tech selloff looks to hold despite the late recovery yesterday.
In other markets, gold is up 0.2% to $4,176 as the precious metal sticks with the post-CPI rebound but is unable to breach key resistance closer to $4,200 still.
There won’t be much on the agenda in the session ahead to shake things up, so broader markets will continue to be left to digest the inflation developments this week and weigh that against the “higher for longer” narrative as central bank decisions will slowly come back into focus in the coming weeks.
This article was written by Justin Low at investinglive.com.