From Marc Chandler at Bannockburn Global Forex:
The US dollar is finishing the week offered. The proximate cause is the arguably softer rates and the as a result of new questions about the AI-meme, following the disappointing Amazon and Intel earnings news and guidance yesterday. This followed the robust Q3 US GDP report that underscore the significance of AI-related investment is fueling US growth (alongside consumption). The eurozone reported stronger than expected Q3 GDP but the pressures in the European peripheral bond market have not gone away. This week, the French 10-year premium is slightly more than six basis points wider, and the Italian premium has widened by about five basis points. At the same time, front month Brent and WTI futures contracts are at new highs. December WTI approached $105 and January Brent poked above $114.
The Bank of Japan completed this week’s central bank meetings, and as widely expected, left the overnight target at 1.25%. Like the Federal Reserve and the European Central Bank, the Bank of Japan is widely expected to hike rates in December. Five G10 central banks met this week and four more meet next week. The Reserve Bank of Australia and the Bank of England are most likely to hike. Norway’s Norge Bank is expected to stand pat, while Sweden’s Riksbank is the closest call and the swaps market favors a hike.
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