- European indices finished today's session mostly lower, snapping a four-day winning streak, with Dax falling 0.19% as traders digested new CPI reports, with the inflation rate in the UK bouncing back to 40-year highs and the core index hitting a new record. In the Eurozone, September’s annual inflation rate was revised lower.
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UK's interior minister Braverman tendered her resignation and expressed concerns about the direction of new government
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Major Wall Street indices resumed downward move and are trading 1.05 lower, after two consecutive sessions of gains as rate hikes concerns overshadowed upbeat quarterly earnings, while Treasury 10 -year treasury yields jumped 13 bps to top 4.1%.
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Minneapolis Fed President Kashkari warned that the US central bank might need to lift its policy rate above 4.75% if underlying inflation continues to accelerate. Kashkari also sees little evidence of a labor market softening. In his opinion it is possible that headline inflation has peaked, however does not see any evidence that core inflation has peaked.
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On the corporate front, Netflix jumped more 14% after reporting earnings and revenue that beat forecasts while recording strong subscriber growth for the third quarter.
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Canada’s annual inflation rate slowed to 6.9% in September, much below the 39-year peak of 8.1% hit in June but slightly above market estimates of 6.8%. The money market is currently pricing in a 60% chance of a 75bp hike by the BoC on October 26. Before the release of CPI figures, expectations oscillated around 30%.
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Oil prices rose nearly 3.0% supported by an unexpected fall in US crude inventories. The latest EIA data showed that crude oil inventories fell by 1.725 million barrels last week, while gasoline stocks went down by 0.114 million barrels. In the evening President Biden confirmed the selling of 15 million additional barrels from the SPR, which provided further fuel for the bulls. Biden also confirmed that the US will purchase oil prices at $70 per barrel going forward.
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The situation on the FX market was dominated today by the strengthening US dollar. US 10-year government bond yields jumped to levels not seen since October 2008. The pound continues to decline due to the deepening chaos in the British government. The Canadian dollar is gaining today as investors expect a decisive move from the BoC amid the disappointing inflation report.
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Precious metals are facing selling pressure amid a stronger dollar. Gold loses nearly 1.5% and fell to $ 1,628, while silver dropped 1.50% and tested $18.40 level..
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Downbeat sentiment prevails on the cryptocurrency market. Bitcoin is losing nearly 0.7% and is trading at $ 19,150. Ethereum is doing worse, losing more than 1.2% and struggling to stay above $ 1,300 level.
OIL.WTI once again bounced off major support at $81.75 and upward move accelerated after White House decision to sell 15 million barrels from the US Strategic Petroleum Reserve (SPR). If current sentiment prevails, the next target for buyers can be found around resistance at $85.50. Source: xStation5
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