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Currency markets flat-line in run-up to US inflation report

Good morning. The dollar is holding firm as oil prices climb and traders batten the hatches ahead of this morning’s US inflation update. Brent, the global benchmark, is trading above $105 a barrel after Iran struck two vessels in the Strait of Hormuz and Yemen’s Houthis targeted several facilities including Saudi Aramco’s headquarters, reinforcing fears of prolonged supply disruptions. Ten-year Treasury yields are holding just below 5.2%, down from 5.35% last week, and broad equity indices are pointing to modest gains at the open even as semiconductor stocks remain under pressure. Long-term yields are easing off their highs as Federal...

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US CPI on the radar

• Quiet markets. Limited market moves overnight. US equities tread water, oil a bit higher, bond yields consolidate, & USD softer. AUD & NZD tick up.• Macro news. Latest US CPI data out tonight. Will it boost or lessen the odds of a late-October US Fed rate hike? Australian jobs report out tomorrow. Global Trends Market movements have been well contained over the past few days with the US holiday at the start of the week compounded by limited news flow overnight. US equities consolidated with the S&P500 treading water not that far from its record highs. Oil prices ticked...

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AI enthusiasm ebbs, weakening dollar

Good morning. The dollar is edging lower and government bond yields are slipping from multi-decade highs as sentiment deteriorates amid a sell-off in artificial intelligence stocks. Global semiconductor shares are tumbling after Chinese chipmaker CXMT announced a major breakthrough that could help it narrow the technology gap with rivals in Taiwan and South Korea, and the broader complex is suffering as investors grow concerned about infrastructure spending by the biggest hyperscalers, with equity futures pointing to losses at the open. Ten-year Treasury yields are holding near 5.18%, down from 5.34% last week as bond markets reopen after yesterday’s holiday, and...

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Apparent easing in geopolitical tensions delivers currency market relief

Good morning. Long-term yields are slipping, oil prices are edging lower and the dollar is retreating after US president ​Donald Trump said the US would not attack Iran before next month’s midterm elections, easing market fears of another major disruption in global energy supplies. Ten-year Treasury yields are down to 5.24% after reaching 5.35% earlier in the week, front-month Brent futures are trading for $102 a barrel while the West Texas benchmark goes for $90, and the trade-weighted dollar is down roughly 0.25% from yesterday’s high. The move could be short-lived. Oil markets will stay on edge as long as...

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Dollar climbs as rate differentials grow more supportive

Good morning. The dollar is edging toward an 18-month high as the Federal Reserve maintains its tightening bias, while higher energy prices and rising yields weigh on other major currencies. The euro, British pound, Canadian dollar, and Mexican peso are all trading near the bottom of their recent ranges, reflecting a fairly consistent move in rate differentials relative to the dollar. Yesterday’s minutes from the Fed’s September meeting confirmed what markets already believed. Participants unanimously agreed that disinflation was making too little progress and that borrowing costs should climb as geopolitics and the artificial-intelligence buildout add to upside price risks....

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