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Market Overview
Dollar Trying to Recover from Wednesday’s Selling
The greenback was trying to erase yesterday’s losses and the
dollar index edged higher from the intraday low, despite not so positive
inflation data from the US.
The core PCE inflation index, which is the favorite way of
measuring inflation for the Fed, unexpectedly deteriorated to 1.8% in October,
down from 1.9% (revised lower from 2.0%) previously. The normal gauge stayed at
2.0% year-on-year. Slowing inflation can deter the Fed from raising rates,
along with other factors such as weakening economic momentum.
From other news, personal spending soared to 0.6% from 0.2%,
while personal income also accelerated to 0.5% from 0.2% previously. Moreover,
initial jobless claims surged to 234,000 from 224,000 previously, while
continuing claims also worsened to 1.71 million from 1.66 million in the
previous week.
US yields continue do drop sharply after Wednesday’s dovish
shift from Jerome Powell and the 10-year yield is now testing the 3.0% level to
the downside. If the yield drops below this level, we could see further
pressure toward the 200-day moving average at 2.96%.
Stocks trimmed their Wednesday’s gains and US benchmarks
opened a bit lower on Thursday, while EU indices gave up nearly 1%. Oil managed
to erase losses and returned from below the 50 USD level to trade at around
51.30 USD, some 2% higher on the day.
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