DXY blasted off last night and mowed everything down:
The Australian dollar was hammered:
Gold rose with American inflation, Oil was thumped:
Base metals were soft:
Big miners are in free fall:
EM stocks were hit:
Junk is screaming a new warning for risk:
Get The App
Join the millions of people who stay on top of global financial markets with Investing.com.
Download Now
As yields jackknifed anew and the curve was pounded:
Which sank stocks, led by Growth:
Westpac has the data:
Event Wrap
US CPI inflation in October was stronger than expected, at 0.9% m/m and 6.2% y/y – the fastest annual pace since 1990 (est. 0.6% m/m, 5.9% y/y). The ex-food and energy core measure also beat expectations, at 0.6% m/m and 4.6% y/y (est. 0.4% m/m, 4.3% y/y). The gains were led by an expected surge in energy prices, but there were additional large gains for new and used cars, tobacco, medical care, and food. Supply chain disruptions are continuing to lift prices, and there are few signs that energy price pressures are abating.
Event Outlook
Aus: Balancing the start of NSW’s recovery against the last stage of Vic’s lockdown, Westpac anticipates employment to fall by 50k in October (market median is +50k), with risks to the upside. A further decline in participation should limit the rise in the unemployment rate to just 0.1ppt (Westpac f/c: 4.7%). November MI inflation expectations will also provide timely insight into consumer views on inflation pressures.
NZ:Food prices in October should reflect a seasonal drop in vegetable prices (Westpac f/c: -0.8%). The November ANZ business confidence survey will meanwhile reveal how businesses are dealing with rising costs and downside profit risks despite firm demand.
UK: Fuel shortages, supply issues and ongoing delta risks are likely to materially slow GDP growth in Q3 (market f/c: 1.5%). The September trade balance should reflect the UK’s tough trade environment due to Brexit.
US: Veterans Day; bond markets closed; equities open.
American inflation was hard to ignore. Here’s more detail:
On a year-over-year basis, the median CPI rose 3.1%, the trimmed-mean CPI rose 4.1%, and the CPI less food and energy rose 4.6%. Core PCE is for September and increased 3.6% year-over-year.
Both flighty and sticky inflation were hot on the month:
And year on year:
There is still loads of imminent supply chain deflation embedded in these numbers but while we wait for that there other rising sticky measures such as rent to spook markets. The implications are obvious:
Multiple rate hikes in 2022. Which is a roaring gale building behind DXY.
We are building swiftly towards a clash of economic fire and ice that threatens risk assets including the AUD.
Written By:
David Llewellyn-Smith
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed. Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website. Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
Get The App