- BOE leaves bank rate unchanged at 5.25% as expected
- BOE's Bailey: Inflation is still too high
- US weekly initial jobless claims 217K vs 210K expected
- US Q3 prelim unit labor costs -0.8% vs +0.7% expected
- Blinken: We are determined to prevent escalation
- US intel believes Iran seeking to avoid a broader war with Israel and US -- report
- Netanyahu is considering a US request for a temporary truce in Gaza
- ECB's De Cos: It's too early to be speaking about rate cuts
- Weekly US EIA natural gas inventories +79 bcf vs +80 bcf expected
- US Sept factory orders +2.8% vs +2.4% expected
- Target CEO touts cautious outlook ahead of the holiday season
Markets:
- CAD leads, USD lags
- S&P 500 up 80 points, or 1.9%, to 4318
- WTI up $2.05 to $82.49 per barrel
- US 10-year yields down 12 bps to 4.67%
- Gold up $2 to $1984
There was no hangover as the post-Fed rip continued on Thursday in a big way. The dollar softened in Asia right after the decision and that continued into the start of US trade. It eventually stalled after USD/JPY broke though 150.00 and ran some stops. EUR/USD also peaked at 1.0668 before falling 50 pips.
The bond market was the catalyst as a deep dose of FOMO kicked in, sending long-dated yields down 13 to 18 basis points. At 4.66%, US 10s are suddenly a long way from 5% as the money on the sidelines come in on the sense that the Fed is done and US deficits aren't worsening.
The sustainability of those assumptions will be heavily tested on Friday with non-farm payrolls on ISM services but the numbers were helpful today, particularly productivity as it indicates non-inflationary growth. I'd contend that those numbers are hard to measure and hardly predictive but I'm not going to argue with the market today.
Equities are on fire, with heavily shorted names, leveraged names and regional banks near the top of the list. Apple will test the market again with earnings after the close.
USD/CAD was particularly soft as the pair backed further away from 1.40. Oil showed some resilience as a pair of early declines were bid back up. That led to a late bid in the loonie that didn't materialize in NZD or AUD, which topped out late in Europe.
Cable hit a session high after the Bank of England decision, reaching 1.2225 but it was later sucked 50 pips lower before some late bids to finish right on the 1.22 figure. Bailey sounded much like the rest of the central banking community as he maintained a hawkish bias but retired to wait-and-see mode.
