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Surprise deceleration in inflation pressures dollar

Underlying consumer price growth slowed dramatically in the US last month, helping support expectations for a more aggressive easing campaign from the Federal Reserve in the new year. According to data published by the Bureau of Labor Statistics this morning—data that skipped the month of October—the core consumer price index rose just 2.6 percent in November over the same period last year, decelerating sharply from September’s 3.0-percent increase. This undershot all estimates among economists polled by the major data providers ahead of the release. On a headline all-items basis, prices climbed 2.7 percent year-over-year, also slowing from the 3.0 percent...

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Dollar advances in line with firming yields

The dollar is edging higher against most major peers as yields firm in the wake of yesterday’s heavy US data slate. Ten-year Treasury rates have nudged up, equity futures are coming under mild pressure ahead of the North American open, and the Canadian dollar, euro, sterling, and yen are all trading with a softer tone. With no major economic releases on today’s calendar, investors will be focused on remarks from Federal Reserve Governor Christopher Waller—highly influential, and to our knowledge, still in the running as a potential successor to Jerome Powell—which could prove market-moving, particularly if he signals a clear...

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US labour market signals

• Mixed signals. US data crosscurrents resulted in modest net market moves overnight. US equities consolidated. Oil prices fell. AUD lost a bit of ground.• US data. Core retail sales stronger, but PMIs underwhelmed. Labour market slack increasing with US unemployment highest since Q3 2021.• Macro events. NZ Q3 GDP due tomorrow. US CPI and ECB/BoE/BoJ meetings later this week. BoE expected to cut while BoJ could hike rates again. Global Trends Push-pull forces stemming from the large batch of US economic data released overnight resulted in modest net market moves. On balance, although the tech-focused NASDAQ ticked higher (+0.2%)...

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Mixed payrolls report knocks dollar lower

US labour markets continued to cool in October and November, slightly raising market bets on a stepped-up easing campaign from the Federal Reserve next year. According to delayed data just released by the Bureau of Labor Statistics, a total -41,000 jobs were lost over the last two months—representing an undershoot relative to consensus forecasts—while the previous two months were revised lower by a total 33,000 positions, bringing the three-month average pace of job creation to 22,000, down from 62,000 ahead of the update. As expected, the federal government shed the largest number of workers, cutting payrolls by a total -172,000...

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Price action slows as traders brace for dangerous week

Currency markets are trading cautiously as participants prepare to close the books on 2025, with many cutting exposure ahead of a week laden with economic data and central bank event risks. The dollar is adding to last week’s losses amid a debate over whether the next meaningful move comes from a narrowing in cross-currency rate differentials or a hawkish repricing in US growth expectations, trading volumes are turning choppy amid year-end rebalancing flows, and measures of implied volatility are showing a small uptick as investors prepare for unexpected moves. Here in North America, a number of key data releases are...

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