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Market Brief, North America

Dollar retreats as conflicting datapoints skew Fed expectations

The dollar is tumbling against most of its major rivals after a private-sector report showed employers slashing payrolls by far more than anticipated, raising market-implied odds on a third consecutive rate cut at the Federal Reserve’s December meeting. According to the Challenger, Gray, and Christmas job cut report—not typically a market-moving release—businesses laid off 153,074 people in October, up 175 percent from the 55,597 announced in the same month last year, and up sharply from the 54,064 announced in September. Policy-sensitive two-year Treasury yields are back below the 3.6-percent mark, equity futures are setting up for incremental gains at the...

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Selloff eases, dollar grinds higher

Currency markets are stabilising this morning as a global selloff eases and the US government shutdown enters a record-breaking 36th day. Asset prices tumbled across the financial landscape yesterday as concern over rarefied valuations intersected with expectations for a slower Federal Reserve easing cycle, but steep losses in the technology sector now appear to be reversing, demand for safe-haven Treasuries is slackening, and risk appetite is—hesitantly—returning in foreign exchange markets. The dollar is trading on a slightly firmer basis along with its safe-haven counterparts, the British pound is enjoying a modest rebound after falling into oversold territory ahead of tomorrow’s...

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Markets flip into more cautious stance as easing hopes fade and correction fears grow

The almighty greenback is holding near a three-month high this morning as investors scale back their exposure to technology stocks and grapple with uncertainty surrounding the Federal Reserve’s next policy move. US equity markets are set to open lower after Palantir Technologies issued a somewhat-disappointing revenue forecast, risking the near-150-percent jump in its share price this year, and intensifying concerns about stretched valuations across the tech sector. Policy-sensitive Treasury yields are easing even after several officials—including Governor Lisa Cook, San Francisco’s Mary Daly, and Chicago’s Austan Goolsbee—signaled a lack of conviction in a potential December rate cut, citing the evolving...

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Dollar inches higher as markets keep driving through the fog

The dollar is starting November on a firm footing, edging higher against a basket of its major rivals after Federal Reserve Chair Jerome Powell last week repeatedly warned markets against expecting more monetary easing in December. Over the past four sessions, front-end rate differentials have shifted slightly in favour of the greenback—enhancing its relative appeal—and strong earnings from a number of the biggest technology names have enhanced foreign investor interest in American equities, adding further support to the currency. The US government shutdown is now in its 34th day and will on Wednesday become the longest ever. With leaders showing...

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Price action slows across financial markets as investors digest mixed signals

Financial markets are turning more cautious this morning as traders process the implications of an unexpectedly-divided Federal Reserve decision, news of a tentative trade truce between the US and China, and a mixed slate of earnings from the world’s largest technology firms. The dollar is maintaining yesterday’s advance, ten-year Treasury yields are holding near 4.06 percent after posting their biggest one-day gain since July, shares in Meta and Microsoft are selling off ahead of the open after both companies said they were increasing spending on artificial intelligence infrastructure, and Alphabet is gaining after it reported a stronger-than-expected performance in its...

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