From Marc to Market:
Week Ahead: Fed's Focus on the "Accumulation of Information" Takes Thunder from CPI
November 07, 2026
(Business travel will disrupt the commentary for the next ten days. It will resume November 18. Good luck, and thank you for your patience.)
The dollar rose against all the G10 currencies last week except for the Swiss franc. The gains were concentrated against the dollar-bloc currencies and the Scandis. Neither sterling nor the Australian dollar drew comfort from their central bank rate hikes. Nor for that matter was the Mexican peso pushed, except for the initial reaction, to the unexpected rate cut.
The US midterm election results boosted two narratives. The first was on limits to data centers. The second was a more optimistic of ending the war with Iran. The Philadelphia Stock Exchange Index fell by almost 12.5% last week. Even if one wants to link part of that to the election, note that it was the fifth consecutive weekly decline. The second narrative helps explain the nearly 13.5% drop in the December WTI contract, and it snapped a five-week rally. The 10-year US Treasury yield fell for the fifth consecutive week. It may be difficult to extend decline much further, with strong jobs report in hand, only a new shock can deter the Fed from hiking in December.
US
Drivers: The Dollar Index has become more correlated (30 days) with changes in the US 10-year yield than changes in the two-year yield (~0.47 vs. 0.33). DXY's 30-day correlation with changes in the Philadelphia' Stock Exchange's Semiconductor Index has been inverted this year, except for around three weeks in late January through early February, and again briefly in late July. It has been positively correlated again over the last couple of weeks and is approaching the year's high (~0.20). The stronger than expected October jobs report offset the decline in stocks and cracks in the AI meme and reinforced expectations of a December hike.
Data: Of course, the CPI and PPI are the week's highlights, but are they very meaningful? The Fed's use of the phrase "the accumulation of more information" appears partly aimed at directing the public and businesses away from putting too much emphasis on any single data point. Second...
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