- 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.
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