Yields and the USDIndex popped higher after the hotter than projected 0.4% rise in headline CPI. Still low initial jobless claims added to the moves. The front end of the Treasury curve is underperforming on the more hawkish implications for the FOMC. The report has fostered some profit taking on the recent Treasury rally. The USDIndex firmed to retest 106.099, but has slipped back to 105.930. Wall Street futures pared earlier gains though the major indexes are still fractionally in the green.
In spite of the hotter headline CPI, we don’t believe the composition of the report will alter the Fed’s policy stance significantly, with most officials looking to “proceed carefully,” as noted in the FOMC minutes, taking a more cautious, tempered approach for now. That underpins our outlook, and the markets’, for no change on November 1 amid a higher for longer strategy.
Click here to access our Economic Calendar
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.