Crypto Retreated Despite a Boom in Equities

The burst of optimism in traditional markets bypassed cryptocurrencies on Tuesday. It seems that some investors shifted some of their assets from coins to shares, reducing the total capitalisation of cryptocurrencies by 1.7% over the last 24 hours.

AUD/USD Soars on US Inflation, Aussie Employment Next

Australian wage growth climbed 1.3% q/q in the third quarter, matching the consensus estimate and above an upwardly revised 0.9% gain in Q2. This was the highest gain since records started in 1997, but the spike was largely due to an increase in minimum wage and a pay rise for elderly care workers.

No More Rate Hikes Likely from BoE as Inflation Hits Two-Year Low

UK inflation fell sharply in October and faster than the Bank of England anticipated, further reducing the prospect of any more rate hikes in this tightening cycle.

Sunset Market Commentary

US October retail sales served as the main dish for today. The countdown was rewarded with a small beat across all gauges. The headline series dropped less than expected, -0.1% m/m vs -0.3%. Two core measures printed a slight uptick of 0.1%. A private consumption proxy, the control group (excluding food services, auto dealers, building materials and gas stations), added 0.2%.

Australian Jobs Report Eyed After Upbeat Wage Data

In contrast to other major central banks, the Reserve Bank of Australia (RBA) hiked interest rates in November under its new chair Michelle Bullock after a four-month pause. But the announcement was well anticipated and a slight dovish tweak in guidance was enough to hammer the Australian dollar.

Japanese Yen Slips as US Retail Sales Beats Expectations

The Japanese yen has lost ground on Wednesday. In the North American session, USD/JPY is trading at 151.09, up 0.48%. In the US, retail sales declined in October but still managed to beat expectations. Retail sales dropped 0.1% m/m, down from a revised 0.9% in September and snapping a streak of six straight increases. Still, this beat the market consensus of -0.3%.

EUR/GBP – No More Rate Hikes Likely from BoE as Inflation Hits Two-year Low

Today’s data has weighed on the pound, as you’d expect given what it means for interest rate expectations, and yet we haven’t necessarily seen an acceleration in the sell-off against the euro.

Yen Jeeps Sinking, Will Tokyo Intervene Again?

The Japanese yen remains the ‘sick man’ of the FX market. It almost touched a three-decade low against the US dollar this week, falling back to levels that prompted Tokyo to intervene in the FX market last year to defend the currency. 

The Relief-Rally Fades Amid a Rebound in Fates

Equities: Equities continued higher yesterday but lost some steam during the afternoon. Yields continue to govern the direction of equities, and it was after yields began to rise that equities retreated. Europe rose a mild 0.4% and US 0.2%. Cyclicals beat defensives and value made a revenge vs growth. Staples and banks were in the top yesterday while utilities declined a little after the surge earlier this week. US futures are a tad lower this morning.

Happily Digesting

Yesterday was about digesting Tuesday’s softer-than-expected US CPI data, feeling relieved that the US Senate passed a stopgap spending bill to avert a government shutdown and welcoming a softer-than-expected producer price inflation, and a softer-than-expected decline in US retail sales – which came to support the idea that, yes, the US economy is probably slowing but it is slowing slowly, while inflation is easing at a satisfactory pace.