Equities round off November with more gains following inflation data

Chris Beauchamp IG

More good news on inflation has bolstered stock markets today, with equities finishing off a solid November in an optimistic frame of mind, says Chris Beauchamp, Chief Market Analyst at online trading platform IG.

Fed continues to win its inflation battle

It turns out that the surge in inflation was transitory, after all. Today’s PCE figures from the US will mean that Jerome Powell is now permitted to think about ticking off inflation from his 2023 to-do list. Having already rallied hard off the back of the CPI data a month ago, US stocks responded in muted fashion, but this November will go down as a very solid month for stocks on Wall Street.

FTSE 100 moves higher along with European markets

Fresh signs of weakening inflation in the eurozone gave stocks a lift on this side of the Atlantic too. In both cases, the effect has been to bring forward the expected date of the first rate cuts, providing more hope that 2023’s era of higher rates will be left behind in 2024.

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Chris Beauchamp

EUR/USD flat lines below 1.1900; divergent Fed-ECB expectations offer support

The EUR/USD pair struggles to capitalize on the overnight bounce from the 1.1835-1.1830 region and oscillates in a narrow band during the Asian session on Thursday. Spot prices currently trade around the 1.1875 area, remaining nearly unchanged for the day and staying within striking distance of an over one-week high, reached on Tuesday, amid mixed cues.

GBP/USD slips heading into the Thursday trading window

The Pound Sterling pulled back from four-year highs on Wednesday, weighed down by a combination of Bank of England dovishness and UK political uncertainty, even as the US Dollar weakened on soft labor market revisions.

Gold posts modest gains above $5,050 as US-Iran tensions persist despite strong labor data

Gold price trades in positive territory near $5,060 during the early Asian session on Thursday. The precious metal edges higher despite stronger-than-expected US employment data. The release of the US Consumer Price Index inflation report will take center stage later on Friday.

Bitcoin holds steady despite strong US labour market

Bitcoin briefly bounced from $66,000 to above $68,000 but slightly reversed those gains following Wednesday's US January jobs report. The top crypto is hovering around $67,000, down 2% over the past 24 hours as of writing on Wednesday.

The market trades the path not the past

The payroll number did not just beat. It reset the tone. 130,000 vs. 65,000 expected, with a 35,000 whisper. 79 of 80 economists leaning the wrong way. Unemployment and underemployment are edging lower. For all the statistical fog around birth-death adjustments and seasonal quirks, the core message was unmistakable. The labour market is not cracking.

XRP sell-off deepens amid weak retail interest, risk-off sentiment

Ripple (XRP) is edging lower around $1.36 at the time of writing on Wednesday, weighed down by low retail interest and macroeconomic uncertainty, which is accelerating risk-off sentiment.