- US September CPI 2.4% y/y versus 2.3% expected
- US initial jobless claims 258K vs 230K estimate
- Fed's Bostic open to pausing rate cut at the November meeting
- Fed's Goolsbee: Inflation came in around expectations, improvement on housing
- US treasury auctions off $22 billion of 30 year bonds at a high yield of 4.389%
- French budget watchdog says government 2025 growth forecast is too high at 1.1%
- Fed's Williams: Expects that the economy will allow the Fed to cut further
- More from the Fed's Williams: Markets have absorbed policy shifts well
- SNB's Martin: Anticipation for inflation in Switzerland has come down quite a bit
- More SNB Vice Chair Martin: No plans to use negative interest rates at the moment
- Fed's Barkin: Inflation is headed in the right direction
Markets:
- Gold up $20 to $2628
- WTI crude oil up $2.71 to $75.96
- US 10-year yields flat at 4.07%
- S&P 500 down 0.2%
- JPY leads, CAD lags
It was a lively session feature some notable data and central bank speak. The market was uneven throughout, particularly in FX where the dollar appeared to rally on the CPI data and fall on the claims data. But a closer look at each data point revealed several caveats that largely neutralize them.
In the bond market, the action was in the front end. Two-year yields hit 4.05% before today's US data but fell to 3.97% afterwards on worries about rising jobless claims, even if the report was full of hurricane and strike caveats. There is also ongoing concern about a war in the Middle East that may have lent a bid, even as Bostic floated the idea of pausing in November.
On a second look, Bostic said he had already penciled in just one further rate hike this year on the dot plot so his comment is hardly a change in stance. That may have contributed to some late-day US dollar selling that largely erased a larger move that had seen the euro touche the lowest in two months at 1.0901.
There is also some fresh talk of politics as polls show Trump shoring up support, including a late-day one from Tipp showing him ahead by a point in Pennsylvania. There isn't a real consensus on Trump's impact on the dollar but some of the equity-specific trades are moving in his favor, showing it's not all betting site hi-jinx.
USD/CAD is another trade in focus after the seventh day of gains saw the pair touch 1.3775 before pulling back by 30 pips late. Oil and better China sentiment have failed to help the loonie and Friday is the Canadian jobs report and the latest BOC business outlook survey.
Cable got some attention after The Guardian reported on a Labour proposal to increase capital gains taxes. There wasn't a big delta from the euro even as GBP fell, so it was likely more on the US side of the equation but the political moves in the UK are adding some intrigue. The pair touched a one-month low of 1.3023 before a 40-pip rebound late.
Finally, eyes are on Israel and a potential strike in Iran today ahead of shabat and Yom Kippur.
Brent crude, hourly:
