Headlines:
- Sterling dominates FX market movement
- UK September CPI at +1.7%, lower than +1.9% expected
- Gold continues to rise
- Potential catalyst for gold selloff
- Gold and Silver move together
- Japan’s Rengo seeks 5% wage hike for 2025
- BOJ’s Adachi: No specific timeline for rate hikes
- Italy’s September CPI remains at +0.7%
- China insists on possible force over Taiwan
Markets:
- EUR and USD strengthen; GBP weakens
- European stocks down; UK stocks up; S&P 500 futures rise 0.1%
- US 10-year yields decline 2.8 bps to 4.010%
- Gold rises 0.5% to $2,675.48
- WTI crude falls 0.4% to $70.29
- Bitcoin jumps 2% to $67,830
Today’s main focus was the UK CPI report, which was softer than expected. It showed a slowdown in core and service inflation, diminishing hopes for a BOE rate cut next month. Market expectations for a 25 bps rate hike increased from ~80% to ~91% after the report.
The pound fell, with GBP/USD dropping from 1.3070 to a low of 1.2983. Currently, it’s around 1.3015, down 0.4% on the day. EUR/GBP is up 0.4% to 0.8365.
The dollar remains steady, with EUR/USD around 1.0900 and USD/JPY stable near 149.20-30. The Australian dollar is under slight pressure, while the Chinese yuan is also softening.
UK stocks are rising due to lower inflation, but European stocks are mostly down, especially in France where the CAC 40 is down 0.6% due to budget concerns.
Bond yields are generally rising, particularly in the UK, with 10-year Treasury yields nearing 4% being a key point of interest.
In commodities, gold is nearing record highs, touching $2,682 earlier, just below last month’s $2,685 record.