Inflation Jitters and Rate Cut Riddles

Investors are on the edge of their seats, waiting for the latest scoop on US inflation data to take a fresh direction in both stock and bond markets. The dollar index remains offered, the US political risks are casting shadows, and there's a rising chorus of opinions playing the guessing game on when and how much the Fed might trim the rates next year.

Key Inflation Data Due in the US and Sweden

US CPI for October is the highlight of this week in terms of data releases. We expect headline at 0.1 m/m and core at 0.3% m/m in line with consensus but with uncertainty coming from the auto worker's strike which might have temporarily raised car prices, as well as from technical factors related to the calculation of health insurance premiums. If there is an upside surprise related to those issues, the market should see through it.

A Drawn Out Countdown to US October Inflation Numbers

News flow hasn’t really picked up in Asian dealings this morning. We fear it’s going to be a drawn out countdown to the US October inflation numbers. And even their significance for daily trading may be a bit overstated because of the conflicting signals they’re likely to carry.

Risk Sentiment Recovers Ahead of a Quiet Data Week

The entire week is also thin on data releases with no market movers in the euro area and only tier-2 data in the US. Focus will be on Fed commentaries after last week's meeting and the University of Michigan survey on Friday. From China, we receive CPI figures on Thursday while Tuesday brings wage data from Japan. On Friday, UK GDP figures are due. The Reserve Bank of Australia meeting on Tuesday will be interesting as markets are pricing a 55% probability of a hike.

Several Key Technical Levels Under Severe Strain

After last week’s bond/equity rally and USD correction, markets might look for a new short‐term equilibrium. Several key technical levels are under severe strain. For the US 10‐y yield we look out whether the 4.5% area holds. The German 10‐y yield dropped below the 2.68% neckline, with the 2.56/60% area a next reference. For EUR/USD, 1.0764 (38% retracement July top/Oct low) is a key resistance. For bonds as well as for the USD correction, maybe the easy part of the move might be behind us.

US Economic Conundrum: Will Rising Interest Rates Affect Spending or the Job Market First?

It is a classic economic puzzle akin to the chicken-and-egg dilemma: as interest rates reach their highest levels in over two decades, which vital component of the economy will give way first—spending or employment?

S&P 500 Analysis: Best Week of the Year, Despite Bad News from Labour Market

Published negative data clearly indicate a cooling of the labour market. Why then did the E-mini S&P-500 futures price end the week up about 5.5%, marking the best week of 2023?

Rally Running on Fumes after Fed and NFP Boost

It's been a relatively subdued start to trading on Monday and the US is eyeing a similar open, with stock markets

Sunset Market Commentary

Markets got some reprieve today after last week’s heavy correction amid an empty eco calendar. These conditions will remain at play throughout the week, rerouting market focus to things like US supply, central bank speeches, risk sentiment or just underlying momentum. Technical considerations come in to play as well.

Aussie Soars to 3-Month High, RBA Expected to Hike

The Australian dollar has edged lower on Monday, after huge gains on Friday. In the North American session, AUD/USD is trading at 0.6499, down 0.21%.