From Marc Chandler at Bannockburn Global Forex:
Overview: The US dollar has a softer profile today. All the G10 currencies are higher, led by 1%+ surge in the yen amid heightened speculation of a rate hike next month, while the US 10-year yield is near 4.25% today, the lowest since the election. Although the Reserve Bank of New Zealand allows for another half-point cut after delivering the second one this year earlier today, the New Zealand dollar has popped up amid sell the rumor buy the fact type of activity. The euro and sterling are firm but holding below yesterday's highs. Emerging market currencies are mostly firmer today, but the Mexican peso continues to underperform. It is off about 0.25% and only the Russian ruble has lost more (~-3.2%).
The large equity markets in Asia Pacific were mixed. China, India, Australia, and New Zealand rose. Japan, Taiwan, and South Korea fell. The Stoxx 600 in Europe is lower for the second session, and US index futures are trading softer. Benchmark 10-year yields are slower. In Europe, you are looking at a 3-5 bp decline, with UK Gilts setting the pace. The 10-year US Treasury yield is off nearly five basis points as is the two-year yield. Lower rates and softer dollar are conducive for gold. The yellow metal is extending yesterday's recovery off $2600. It is straddling the $2650 area in Europe. A ceasefire between Israel and Hezbollah has not had much impact on January WTI. It is little changed on the day, slightly below $69. It settled last week closer to $70.........America
Given tomorrow's holiday, the US is releasing a ton of data today. The revisions to Q2 GDP are the least of it. October goods trade, durable goods orders, and personal consumption expenditures will investors and economists get a handle on the economic momentum at the start of Q4. Growth is expected to moderate this quarter to 2.0%-2.5% from 2.8% in Q3 and 3.0% in Q2. The 0.4% rise in consumption is solid even if a tick lower than September's 0.5% gain. Of course, the deflators will draw much interest but 1) due to the prior release of CPI and PPI, there is typically little surprise and 2) we already know that both the headline and core rates accelerated slightly. Recall that the base effect, which Fed Chair Powell discussed at the conclusion of the last FOMC meeting, will likely translate into a bounce here in Q4 (Q4 23, the PCE deflator rose at an annualized rate of less than 1% but then accelerated at a 4.4% annualized rate in Q1 24, which will make for an easier comparison next year)....
....MUCH MORE
