Headlines:
- Dollar holds tentatively lower so far on the day
- The bond market continues to hold all the cards
- Saxony September CPI +5.4% vs +6.8% y/y prior
- Bavaria September CPI +4.1% vs +5.9% y/y prior
- Spain September preliminary CPI +3.5% vs +3.5% y/y expected
- Economic institutes forecast 0.6% GDP contraction for Germany this year
- China to introduce tax exemptions and cuts for affordable housing
Markets:
- AUD leads, USD lags on the day
- European equities mixed; S&P 500 futures down 0.1%
- US 10-year yields up 3.7 bps to 4.647%
- Gold flat at $1,875.15
- WTI crude down 0.4% to $93.28
- Bitcoin up 0.8% to $26,446
The two main outperformers this week are the laggards today, that being the dollar and oil.
The latter raced higher in Asia trading to $95 but is marked down by 0.4% now to $93.27 while the greenback is down across the board as it gives back some of the gains this week.
EUR/USD tested waters below 1.0500 for the first time since January before bouncing up to 1.0540 levels while USD/JPY is still caught out by intervention fears, down 0.2% to 149.30 currently.
All of this comes despite higher Treasury yields on the day, with 10-year yields in the US touching above 4.64%. And that is still keeping equities rather nervous, with some selling pressure in Europe which was met by dip buyers - who seem to be keeping things interesting ahead of month-end and quarter-end.
In terms of data, we got Spanish and German inflation numbers. The former continues to reaffirm stickier price pressures while the latter is showing a decent drop, which fits expectations. That being said, the monthly readings are still rising and alongside higher oil prices, that just means the ECB cannot quite breathe easy just yet.
