- U.S. CPI inflation for October rose to 2.6% y/y, in line with expectations, while core inflation remained at 3.3% y/y. The lack of inflation surprise raised expectations for interest rate cuts
- However, this did not hurt the US dollar. EURUSD is trading at 1.055, its lowest level since October 2023. Wall Street continued its gains, albeit at moderate levels, with declines in Europe.
- Donald Trump officially acknowledged today that Elon Musk will take over the Department of Government Efficiency. While not meant to be an official government position, Musk is expected to advise the administration and Trump on spending cuts. Musk has an ambitious plan to reduce spending by $2 trillion, which seems like an ambitious plan with current spending nearing $7 trillion
- The strong dollar is putting pressure on the precious metals market, with gold retreating another 0.6% today and silver testing the $30.5 per ounce area. Palladium and platinum are losing more than 1%. Yields on 10-year U.S. Treasury securities rose more than 2 basis points today, to 4.45%
- Statements by Fed members Kashkari, Logan, Musalem and Schmid indicate that the Federal Reserve is gaining confidence that inflation will fall to target. However, in Logan's view, current interest rates are close to a neutral rate for the economy, which shows some divergence from the beliefs of some members, suggesting that Fed rates remain at restrictive levels
- All Fed members expressed confidence in solid conditions among US businesses and consumption. However, they remain cautious about assessing labor market conditions, with most suggesting that conditions have cooled markedly, and the Fed will be inclined to 'react' if it sees further weakness in the data
- Shares of vaccine maker mRNA gain more than 5% today; the company is looking to acquire China's Biotheus to expand its product portfolio in cancer-fighting therapies; the acquisition is expected to cost $800 million, and the deal is expected to close in Q1 2025 (BNT327)
- Siemens Energy shares rose nearly 19% today, following last quarter's results; the company reported record orders and raised forecasts; Siemens shares are the strongest component in the DAX this year; they are up 290% year-to-date
- Energy commodities are gaining; Brent and WTI crude oil are up more than 1%, and natural gas contracts are gaining more than 3%, surpassing the psychological level of $3 per MMBtu
- Cocoa futures rose more than 3% today as traders worry about the impact of heavy rainfall in Africa, ahead of the peak harvest season in December. The rainfall increases the risk of tree diseases and mold, limiting supply. Cocoa stocks at New York ports remain lowest since 2005
- Agricultural commodities are losing, pressured by a strong dollar; declines are seen particularly in wheat futures, where additional pressure is added by the prospect of precipitation in Russia and improving crop ratings in the US; WHEAT loses 1.5%
- Cryptocurrencies have had another very successful day. Bitcoin posted a record high near $92.5K, on a wave of rising inflows into ETFs and prospects of industry support from the new Donald Trump administration
- After the U.S. session, data center infrastructure provider Cisco Systems (CSCO.US) will report results; at 9:30 PM GMT the change in U.S. crude oil inventories according to API will be known.
Daily Summary: As a ceasefire drifts away, markets lose ground
UnitedHealth Group earnings: Healthy growth
US Open: Macro Up, Tensions Down!
Defense sector earnings: RTX, Thales and Northrop Grumman
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