Hotter-than-expected CPI fueled Fed fears, focus shifts to US bank earnings | MarketTalk: What’s up today? | Swissquote

Show notes

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.
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