S&P 500 Has Cooled Off. What are the Signs of an Upturn?

Futures on the S&P500 are rising early Monday after a correction last week. Markets are gearing up for a week of important events, from releasing the US Treasury’s borrowing plans to the FOMC’s comments on interest rates and the monthly employment report.

Euro Pushes Higher as German Inflation Falls

Germany’s consumer inflation dropped to 3.8% y/y in October, down sharply from 4.5% in September and below the market consensus of 4.0%. Food and energy prices decreased, which contributed to the inflation print being the lowest since August 2021. Core inflation dropped from 4.6% to 4.3%.

Sunset Market Commentary

Today’s economic calendar served as nothing more than an appetizer compared to what’s to come in the next few days. In the run-up to the euro area wide figure, national inflation readings were due in Spain, Germany and Belgium. They all printed to the soft side of expectations. German HICP even declined 0.2% m/m in October, bringing the yearly outcome to the lowest since July 2021 (3%).

Eurozone Growth Expected to Stagnate, Can the Euro Hold On?

The Eurozone economy has struggled this year, as consumers have been squeezed by rising mortgage costs and elevated energy prices. Economic growth in the second quarter slowed to just 0.5% on a yearly basis, and business surveys warn that the situation will probably get worse, putting the risk of a mild recession on the radar. 

Bank of Japan Marginally Tweaked Yield Curve ControlPolicy

The Bank of Japan marginally tweaked its Yield Curve Control policy this morning. In July, they doubled the maximum tolerance band around the 0% yield target for the 10-yr Japanese from 50 bps to 100 bps. That 1% was a hard limit which would be defended at all cost.

Bitcoin Triangle and Altcoin Growth

The difficulty of mining Bitcoin has reached an all-time high. According to another recalculation, it has increased by 2.34%, up 76.6% YTD to a new record of 62.46T. The average Bitcoin network hash rate at the current difficulty level is expected to be 449.68 EH/s, also a record.

USD/JPY Analysis: Playing With Fire Continues

This provoked a strengthening of the yen (1). The USD/JPY rate dropped to a two-week extreme of 148.8 per US dollar in anticipation of news from the Bank of Japan.

A Trick or a Treat from Bank of Japan: Indirect Way of Scrapping YCC

The Bank of Japan (BoJ) has kept its key policy short-term interest rates unchanged at -0.1%, the sole major central bank that still maintains negative interest rates while the rest of the developed world has already exited from accommodative monetary policies except for China.

Canada's Economy Recorded No Growth in August, Likely Stalled in September

Canadian economic growth came in flat on a month-on-month (m/m) basis in August, below Statistics Canada's advanced estimate and market expectations of a mild 0.1% m/m gain. The flash estimate for September points to another month of zero growth.

Doves Firmly in Control of BoE Meeting

With the focus lately turned elsewhere, it has been a quiet month for the ΒοΕ, especially as its members continued to be less active when compared to their Fed and ECB counterparts. This comes after a difficult September BoE meeting, considering the 5-4 split vote in favour of a rate pause. Developments since then have been mixed as the late September upside surprise in the final GDP figure for the second quarter of 2023 was not followed by a plethora of stronger prints in other data releases.