- Yesterday's euphoric gains on Wall Street supported the bulls in the Asian session, which saw strong gains in the benchmarks of Japan, South Korea and China, where several important macro data were released today. Korea's KOSPI rose nearly 2%, Japan's Topix gained 1.1%, and the Nikkei posted gains of more than 2.5%, beating the scale of yesterday's 2.1% rally on the Nasdaq 100
- China's Hang Seng Index posted a nearly 3.2% rally in response to a general improvement in risk sentiment, the perspective of additional stimulus to the economy (reported yesterday by Bloomberg), and most importantly, the release of significant macro data from the Chinese economy, where the retail sales came in higher than expected
- China's industrial production rose 4.6% vs. 4.5% forecast and 4.5% previously. Investment in metropolitan areas indicated a 2.9% increase, below forecasts of 3.1% and the previous 3.1% reading. The unemployment rate was 5%, in line with expectations and the previous reading, but retail sales rose 7.6% vs. 7% estimates and 5.5% previously signaling higher consumption and demand in the economy
- Wall Street indexes extended their longest upward streak yesterday following CPI inflation readings from the US. The S&P 500 index rose more than 1.9%, and more than 95% of the benchmark companies closed the session higher. This morning, US index futures are again making slight gains.
- Tesla led yesterday's gains among large companies, and Nvidia recorded its tenth consecutive upward session. The regional bank index rose nearly 6%, and the Russell 2000 small-cap benchmark gained more than 5%.
- Jamie Dimon, CEO of J.P. Morgan, indicated that people are overreacting and overestimating short-term changes in inflation readings. Bank of America backed away from its previous forecast of one more Fed rate hike in the current cycle
- Markets are now pricing in close to 100 bps of Fed rate cuts in 2024 and expect 50 bps cuts by July, next year. Investors have almost completely reduced their forecasts for the likelihood of a Fed hike in December. The prospect of the end of the cycle is putting pressure on the U.S. dollar, the yield on five-year U.S. Treasury bonds fell as much as 0.24% yesterday, to 4.42%.
- European index futures point to a higher opening to the session on the Old Continent, with the UK100 gaining 0.4% against a 0.2% rally in DE30 contracts.
- French ILO Unemployment Rate came in weaker than expected: 7.4% vs 7.3% expected and 7.3% previously
- EURUSD is trading flat today, near 1.087 and the USDIDX dollar index is approaching the vicinity of 104 points, gaining 0.06%
- WTI and Brent crude oil are trading 0.6% higher, while natural gas contracts NATGAS are down a small 0.7%
- A weaker dollar has supported precious metals prices. Gold gains 0.3% and is trading near $1,970 per ounce. Palladium strengthens by more than 2.2%, and silver rises by 0.7%. A recovery among Chinese benchmarks is also likely to improve sentiment in the industrial metals market
- Cryptocurrency market sentiment has weakened despite a decline in dollar strength and a rally in the stock market. Bitcoin is trading near $35,500 and failed to return to gains after the US CPI reading. Ethereum retreated below the key psychological support of $2,000
- Markets may price in temporary softening US - China relations as Xi Jinping visits US - John F. Kirby, Coordinator of Strategic Communications at National Security Council, said that 'We obviously don't support independence for Taiwan'
- Australia's wage index rose 4% y/y vs. 3.9% forecast and 3.6% previously. On a quarterly basis, it came in line with expectations at 1.3% vs. 0.8% previous growth. 'Aussie' strengthened against the USD yesterday and AUDUSD continues its upward move after the data release
- Japan's Q3 GDP grew 1.2% y/y vs. 1.7% y/y in expectations. The quarterly decline was -0.5%, below forecasts of -0.1% and 1.1% previous growth. The annualized rate was -2.1%, well below forecasts of -0.6% and 4.5% previously
- Israeli Defence Minister, Galant indicated that IDF ground invasion will include Southern Gaza too. White House confirmed that Hamas and Palestinian Islamic Jihad operating out of hospitals in Gaza, Including Al-Shifa. According to John F. Kirby, Hamas has stored weapons at Al-Shifa and is prepared to respond to Israeli military operation
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