An Avalanche of (High-Profile) ECB and Fed Speeches

There’s an avalanche of (high-profile) ECB and Fed speeches scheduled for release. They serve as a wildcard for trading. In any case we don’t think they’ll be able to dramatically turn the tide on core bond yields. The force of gravity remains strong for the time being with next support in the US 10-y yield kicking in at 4.34% and around 2.50% in the German 10-y yield.

Euro Under Bearish Pressure

In today's Asian trading session, EURUSD lost momentum as increased U.S. dollar demand exerted bearish pressure on the pair. Market participants will closely observe the European Central Bank (ECB) President Christine Lagarde's speech at 11:30 a.m. UTC today and the release of the U.S. weekly Initial Jobless Claims at 12:30 p.m. UTC. The data could affect the euro's price.

Crypto Market Soars to New Heights

On Wednesday, the crypto market experienced a new growth spurt, rising 4.6% in 24 hours to $1.44 trillion, updating highs since May 2022. Bitcoin and several altcoins returned to the highs they tested a week earlier. Cardano (+11.11%) and Solana (+10.5%) led the growth among the leading coins.

Australian Dollar Yawns After Strong Employment Gains

Australian employment was hotter than expected in October, as the economy created 55,000 jobs. This blew past the market consensus of 20,000 and was much higher than the modest September gain of 7,800. The unemployment rate rose to 3.7% as expected, up from 3.6%, and the participation rate inched higher to 67%, up from 66.8%.

GBP/USD Edges Lower, Eyes Retail Sales

The British pound has extended its losses on Thursday. In the European session, GBP/USD is trading at 1.2401, down 0.11%.

NZD/USD Edges Higher Ahead of Manufacturing PMI

New Zealand’s manufacturing sector has been in decline for seven consecutive months and little change is expected from the October PMI, which will be released on Friday. The market consensus stands at 45.0, compared to 45.3 in September, which marked a 2-year low. Business activity in the manufacturing sector has been dampened by weak global demand and elevated borrowing costs have exacerbated the prolonged slump.

Will US CPI Alter Fed's Rate Path?

The US dollar fell by 1% against six major currencies after traders saw a slowdown in hirings and concluded that the Fed won't raise rates again. At the same time, a group of investors became more confident that signs of economic weakness might motivate rate cut talks in 2024, although the Fed chief, Jay Powell, kept that scenario out of the radar during November’s FOMC policy meeting.

Powell Keeps Tightening Bias

US: Fed chair Jerome Powell yesterday said that he was not confident the Fed had reached a monetary policy stance to achieve the 2% inflation target and he thought there was still a long way to go. He also underlined that more tightening would come if needed.

US Yields Spike, Equities Fall, Oil Rebounds

Bad. Yesterday’s 30-year treasury auction in the US was bad. And this time, the bad auction got the anticipated reaction. The US Treasuries saw a sharp selloff - especially in the 20 and 30-year papers. The US 30-year yield jumped 22bp, the 20-year yield jumped more than 20bp, while the 10-year yield jumped 18bp to above 4.60%.

Fed Chair Stressed Progress Toward 2.0% Inflation Goal Not Assured

Despite this two-sided risk, the Fed Chair stressed that progress toward to 2.0% goal is not assured and that the Fed won’t hesitate to tighten policy further if this would turn out to be appropriate. On broader financial conditions, Powell indicated that the Fed takes higher long-term yields into account, but it depends on how long the market move lasts.