Ipek Ozkardeskaya
Swissquote Bank Ltd
Yesterday’s inflation report in the US filled investors with joy and further hope that inflation in the US may have peaked this summer and we will be heading lower from here, and that the Federal Reserve (Fed) will adopt a softer monetary policy stance and hike, yes, by 50bp today, but certainly not more than another 25bp in February.
But Powell could also stress the fact that inflation remains significantly high compared with the 2% policy target, and that relaxing the tightening measures prematurely is not a good idea.
In the FX, the US dollar index fell following the softer-than-expected CPI print, and hit a fresh low since summer.
The softer US dollar, and stronger euro sent the European indices to fresh highs since summer. The DAX flirted with the June peak, and the Eurostoxx50 traded at the highest level since February
Crude oil rallied more than 2.50% yesterday, on hope that the Fed could slow down the rate hikes, and not push the US into a deep recession to fight inflation.
In cryptocurrencies, the FTX drama continues with the arrestation of Sam Bankman-Fried in the Bahamas, news that investors withdrew $3.7 billion worth of funds from Binance since last week, and that Binance reportedly stopped the stablecoin USDC withdrawals.
But Bitcoin couldn’t care less. The price of a coin advanced more than 3% yesterday, showing that the FTX drama has been priced in and out and further drama should not hit the coin harder.
This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
Recommended Content
Editors’ Picks
EUR/USD stays under pressure near 1.0550 on renewed USD strength
EUR/USD holds lower ground near 1.0550 on Wednesday. The US Dollar benefits from rising US Treasury bond yields and the cautious market mood, forcing the pair to stay on the back foot. Several Federal Reserve policymakers will be delivering speeches later in the day.
GBP/USD reverses toward 1.2650, erases UK CPI-led gains
GBP/USD is falling back toward 1.2650 in the European session on Wednesday, having erased UK CPI inflation-data-led gains. The data from the UK showed that the annual inflation, as measured by the change in the CPI, rose to 2.3% in October from 1.7% in September. Fedspeak awaited.
Gold price moves away from one-week top on rising US bond yields, modest USD strength
Gold price retreats after touching a one-and-half-week top earlier this Wednesday and drops to a fresh daily low, below the $2,630 level heading into the European session. A goodish pickup in the US Treasury bond yields, bolstered by bets for a less aggressive policy easing by the Fed, revives the USD demand and undermines demand for the non-yielding yellow metal.
Why is Bitcoin performing better than Ethereum? ETH lags as BTC smashes new all-time high records
Bitcoin has outperformed Ethereum in the past two years, setting new highs while the top altcoin struggles to catch up with speed. Several experts exclusively revealed to FXStreet that Ethereum needs global recognition, a stronger narrative and increased on-chain activity for the tide to shift in its favor.
Sticky UK services inflation to keep BoE cutting gradually
Services inflation is set to bounce around 5% into the winter, while headline CPI could get close to 3% in January. That reduces the chance of a rate cut in December, but in the spring, we think there is still a good chance the Bank of England will accelerate its easing cycle.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.