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US inflation data shows the US moving further away from the Fed’s 2% target as Trump prepares to re-enter the Oval Office: US inflation saw a slight increase in October to 2.6%, in line with expectations and 0.2 percentage points above the 2.4% recorded in September, according to the US Bureau of Labor Statistics. Core inflation, which excludes food and energy, remained steady at 3.3% but showed a third consecutive monthly increase of 0.3%, signaling persistent underlying price pressures. October’s data comes at a critical point for the US economy, as the Fed weighs its next move ahead of President-elect Donald Trump taking office early next year.
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But traders don’t see the rise in inflation hampering the Fed’s road to monetary easing: Traders are pricing in an 80% chance of another rate cut when the Fed meets next to decide interest rates in mid-December, Bloomberg reports. During its last meeting earlier this month, the Federal Reserve cut rates by 25 bps, after having kicked off its easing cycle in September with a half a percentage point cut.
Some are already warning that Trump’s policies could complicate the Fed’s fight against inflation: Trump’s reelection and his proposed policies — tariffs, tax cuts, and mass deportations — could potentially push inflation higher. Economists are concerned that such measures could fuel price pressures while adding uncertainty, making the Fed’s task of achieving a “soft landing” even tougher. (Financial Times | BBC | New York Times | Guardian)
Market reax: Two-year Treasury yields, which are more sensitive to Fed decisions, fell as much as 10 bps after inflation data was released.
BTC HITS ANOTHER HIGH-
Another day, another BTC peak: BTC hit a fresh high of USD 93.2k yesterday before reversing some of its gains to sit at USD 88.9k at midnight, driven by inflation concerns and a strong post-election rally. (Reuters | Bloomberg | CNBC)
The cryptocurrency has been on a Trump-driven rally since Trump was reelected to the Oval Office on 5 November. We dove deeper into the rally in a Planet Finance published earlier this week.
MARKETS THIS MORNING-
Asian markets are starting mostly in the green during early trading this morning, with Japan’s Nikkei up 0.5%, followed by Korea’s Kospi at 0.4% in the green, and Hong Kong’s Hang Seng at 0.1%. China’s Shanghai index is trading in the red at -0.1%.
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TASI |
11,930 |
-1.0% (YTD: -0.3%) |
|
|
MSCI Tadawul 30 |
1,501 |
-1.0% (YTD: -3.2%) |
|
|
NomuC |
29,206 |
+0.3% (YTD: +19.1%) |
|
|
USD : SAR (SAMA) |
USD 3.75 Sell |
USD 3.75 Buy |
|
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Interest rates |
5.25% repo |
4.75% reverse repo |
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|
EGX30 |
31,433 |
-0.5% (YTD: +26.3%) |
|
|
ADX |
9,372 |
-0.5% (YTD: -2.2%) |
|
|
DFM |
4,733 |
+0.7% (YTD: +16.6%) |
|
|
S&P 500 |
5,985 |
+0.02% (YTD: +25.5%) |
|
|
FTSE 100 |
8,030 |
+0.1% (YTD: +3.8%) |
|
|
Euro Stoxx 50 |
4,740 |
-0.1% (YTD: +4.8%) |
|
|
Brent crude |
USD 72.28 |
+0.5% |
|
|
Natural gas (Nymex) |
USD 2.98 |
-0.3% |
|
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Gold |
USD 2,586.50 |
-0.8% |
|
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BTC |
USD 88,897.70 |
+0.7% (YTD: +110.4%) |
THE CLOSING BELL: TADAWUL-
The TASI fell 1.0% yesterday on turnover of SAR 5.5 bn. The index is down -0.3% YTD.
In the green: Burgerizzr (+10.0%), Saudi Cable (+5.0%) and Al Khaleej Trng (+4.1%).
In the red: Sharqiyah Dev (-5.2%), Budget Saudi (-3.9%) and Care (-3.3%).
THE CLOSING BELL: NOMU-
The NomuC rose 0.3% yesterday on turnover of SAR 55.3 mn. The index is up 19.1% YTD.
In the green: Leaf (+8.7%), Fad (+7.2%) and Al Mohafaza For Education (+6.0%).
In the red: Al Razi (-8.0%), First Avenue (-6.2%) and Obeikan Glass (-6.0%)
