U.S. CPI in October was lower than expected!Chinese assets and global stock markets sent the dollar plummeting_Oriental Fortune Network

On November 14, the U.S. Department of Labor released the latest price data. Data show that the U.S. consumer price index (CPI) in OctoberCPI) rose 3.2% year-on-year and remained unchanged month-on-month, lower than consensus market expectations.

Investors expressed optimism that the Federal Reserve would continue to pause on raising interest rates. Affected by this, assets including European stock markets, U.S. stocks, A50 index futures, the exchange rate of RMB against the U.S. dollar, the exchange rate of the Euro against the U.S. dollar, gold, silver and other assets rose linearly, while the U.S. dollar index plunged rapidly. Additionally, U.S. Treasury yields were sharply lower.

Global assets soared and the U.S. dollar plummeted

The U.S. price rise, which is lower than market expectations, has excited global investors and hopes that the Federal Reserve will continue to suspend interest rate hikes. After the data was released, major assets around the world experienced linear gains.

U.S. stocks opened higher and moved higher, with the three major indexes collectively closing higher. The Nasdaq rose 2.37%, the S&P 500 rose 1.91%, and the Dow Jones Industrial Average rose 1.43%. Among them, the Nasdaq hit a new closing high since August 2; the S&P 500 Index and the Dow both hit a new closing high since September 15.

Major European stock indexes collectively closed higher, with the UK’s FTSE 100 index rising by 0.20%, Germany’s DAX30 index rising by 1.76%, and France’s CAC40 index rising by 1.39%.

The RMB exchange rate rose sharply against the US dollar.

FTSE China A50 Index futures also surged, rising nearly 2%.

The euro’s exchange rate against the U.S. dollar also rose sharply, rising by more than 1%.

The most actively traded December gold futures price in the New York Mercantile Exchange gold futures market rose by $16.3 on the 14th to close at $1,966.5 per ounce, an increase of 0.84%.

On the same day, the price of silver futures for delivery in December rose 77.4 cents to close at $23.132 per ounce, an increase of 3.46%; the price of platinum futures for delivery in January 2024 rose by $29.2 to close at $892.8 per ounce, an increase of 3.38% .　　

at the same time,The U.S. dollar index fell sharply on the 14th. As of late New York trading, it measured the U.S. dollar against six majorcurrencyThe U.S. dollar index fell 1.49% to 104.053.U.S. bond yields generally fell.

Price rise slows

From the perspective of various subdivisions, food prices increased by 3.3% year-on-year. Transportation services and housing increased by 9.2% and 6.7% respectively. The biggest decline was in energy prices, which fell by 4.5%, and used car prices also fell by 7.1%. The core CPI, which excludes food and energy prices, rose by 4.0%, the lowest level since September 2021.

Month-on-month increase in the U.S. consumer price index (data source: U.S. Department of Labor)

Year-on-year growth trend of the U.S. Consumer Price Index (the blue line is the overall CPI, the red line is the core CPI excluding food and energy, data source: U.S. Department of Labor)

Organizations feel optimistic

Since U.S. prices have a direct impact on the Fed’s monetary policy, October’s lower-than-expected prices made investors more optimistic about the Fed’s suspension of interest rate hikes.

Bryce Doty, portfolio manager at Sit Advisors, said: “As inflation continues to slow, it looks smart for the Fed to effectively end its tightening cycle. Yields have fallen sharply as the last Investors who don’t believe the Fed is done may throw in the towel.”

Jeffrey Roach, chief economist at LPL Financial, said: “The possibility of the Fed pausing to raise interest rates is increasing, but they will not relax easily. Despite the economic slowdown, the Fed is likely to continue to issue hawkish comments, “We will continue to warn investors not to become complacent with the Fed’s determination to reduce inflation to its long-term goal of 2%.”

Fed’s ambiguous attitude

Even if the Fed completes raising interest rates, it will benchmarkinterest rateThere remains considerable uncertainty about how long it will remain at its highest level in about 22 years.

Fed Chairman Jerome Powell said last week that he still does not believe they have done enough to get inflation down to 2% annual and that they will not hesitate if more progress is not made to raise interest rates.

former st. louis federal reservebankGovernor Bullard said the Fed still has a long way to go in combating inflation and the risk of prices rising again remains.

Between March 2022 and July 2023, the Federal Open Market Committee implemented 11 interest rate hikes, bringing the federalfundinterest rateThe target range was raised from 0.25%-0.5% to 5.25%-5.5%, and inflation has since fallen sharply.

Although the market now believes that interest rates have peaked and is beginning to expect a rate cut next year, the St. Louis Fed who resigned in August this yearbankBullard, the governor, said the Fed’s work is far from over.

“The FOMC has been doing well so far. Inflation has come down, core PCE fell from 5.5% to 3.7% on a 12-month basis — good, but that’s still just back to 2% Half of the target, so there’s still a long way to go,” he said at the UBS Europe conference in London. “I think the data have to be watched carefully and there is a good chance that inflation will reverse and go in the wrong direction.”

The recently released “2024-2026 U.S. Economic Outlook” by UBS predicts that as the world’s largest economy, the United States, slips into recession, the Federal Reserve will cut interest rates by as much as 275 basis points in 2024, almost four times the market expectations. times. The report stated that although the U.S. economy remains resilient into 2023, many of the same headwinds and risks remain.At the same time, thebankof economists said, “The growth support that prompted overcoming these obstacles in 2023 will continue to diminish in 2024.”

UBS expects deflation and rising unemployment to weaken economic output in 2024, leading the Federal Open Market Committee (FOMC) to cut interest rates, “first to prevent the nominal funds rate from becoming increasingly restrictive as inflation falls,” and then contain economic weakness later in the year.”

(Source of article: Securities Times)

Source of article: Securities Times

Original title: Sudden! Chinese assets and global stock markets tumbled, and the U.S. dollar plummeted!Major U.S. data released