The US stock futures reduced their losses, while the dollar fell on Wednesday, after data showed that US inflation continued to slow as expected last month, helping to reinforce traders’ conviction that the Federal Reserve (Fed) could cut rates again in December.
The Bureau of Labor Statistics It said the consumer price index rose 2.6% year-on-year in October, while the base rate, which excludes food and energy, rose 3.3%, in line with forecasts. On a monthly basis, the variation was 0.2%, less than the 0.3% expected by analysts.
US futures rose after the numbers, turning slightly positive, indicating that main benchmark indices They could recover some of Tuesday’s drop at the open later. Meanwhile, the dollar index fell slightly, while the yields of treasury bonds US short-term bonds fell as investors piled into two-year bonds, which in turn helped gold modestly extend the day’s rally.
The world index of all countries MSCI was last down 0.17%, with the stock Europe falling a bit after the previous day’s 2% loss.
“The online number is allowing the market to breathe a little easier and focus more on the positive aspects of less regulation and a possible increase in business,” he told Reuters Robert Pavlik, senior portfolio manager Dakota Wealth. “Right now, we are on a sliding path towards another rate cut. It could be altered, but right now it looks like we could have another rate cut,” he added.
Treasury yields—which had skyrocketed since Trump’s victory donald trump last week—fell sharply, with two-year bonds falling to a session low of 4.256%, from more than 4.36% just before the data, as traders adjusted their calculations on the likelihood of a rate cut. rates of the Fed in December.
Traders estimated that the probability of a quarter-point cut when the Federal Reserve meet on December 18 was 69%, compared to 62% in the early hours of Wednesday, according to the tool FedWatch of CME Group.
Still, “we’re still in the middle of revaluing the Trump operation,” he said. Samy Chaar, chief economist of Lombard Odier, “There was slight uncertainty around the House, but now we are close to certainty when it comes to a Republican sweep.”
The effect on the dollar
In currency markets, falling Treasury yields put the dollar under some pressure, but held near a six-month high against a basket of major currencies.
He euro rose 0.1% to $1.0630, still near a one-year low, while the yen also weakened on the day, but managed to break above the 155 per dollar level at 154.615.
The raw materials, which have suffered from the strength of the dollar and concern among investors about growth prospects in the key consumer, China, They also recovered some losses. He gold rose 0.6% to $2,610 an ounce, recovering from the previous day’s nearly two-month low, while silver rose 0.8% on the day to $30.93 an ounce.
Source: Ambito
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