Daily summary: US inflation data spurs Wall Street surge ð
Daily summary: US inflation data spurs Wall Street surge ð
00:56 12 āļāļąāļāļ§āļēāļāļĄ 2024
Wall Street extends a bullish rally during Wednesday's session after CPI data cemented the market's view that the Fed will cut interest rates at its December meeting. The Nasdaq is currently gaining 1.63%. At the same time, the S&P500 is adding 0.90%.
Tesla shares rocketed to new highs during today's session, with Elon Musk becoming the first man whose fortune broke through the psychological barrier of $400 billion.
Excitement around the Willow quantum computer is also driving Alphabet (GOOGL.US) shares, which gained 5.5% today.
US CPI inflation rose to 2.7% y/y for November, in line with expectations of 2.6% y/y. Core inflation remained at 3.3% y/y. The lack of surprise makes the U.S. market confident of an interest rate cut by the Fed next week.
Correspondingly, we observed a temporary weakening of the US dollar. Nevertheless, later the EURUSD pair fell again below the level of 1.0500.
The Bank of Canada cut interest rates by 50 bps as forecast, to 3.25% from 3.75% previously. In the announcement, we no longer read the promise that further cuts are appropriate. Macklem emphasizes that the BoC is moving to a more gradual approach to interest rates at this point. The market estimates a 70% probability of another cut in January.
Cryptocurrencies are regaining ground today after yesterday's sell-offs. Bitcoin surpassed $100,000 after US CPI data bolstered bets on a dovish Fed, thus supporting sentiment around risky assets. The most recognizable cryptocurrency gained 4.11% today, while Ethereum added 4.6%.
Crude oil is gaining more than 2% today, with WTI crude testing the $70 per barrel level. US crude inventories fell marginally stronger than expectations at 1.42 million barrels. In addition, the market is hoping for new stimulus measures for the Chinese economy and a sizable deficit in the oil market in the first quarter of next year due to OPEC+'s recent decision to delay production growth.
Gold scores its 3rd consecutive day of gains today, crossing the $2,700 per ounce level for the first time since November 25. The rise in gold prices can be linked to greater certainty regarding the Fed's cut.
Tomorrow is an important ECB decision on interest rates. Currently, the market is fully pricing in a 25 basis point cut and only a 4% probability for a larger move.
