Headlines:
- The bond market hints at more pain to come for the dollar
- BOE's Bailey: We are not in a place now to be discussing interest rate cuts
- ECB's de Guindos: Our objective is to bring inflation back to 2% target
- BOJ's Adachi says any big policy decision will have to wait until next year's wage talks
- BOJ's Adachi: Difficult to end negative rates until positive wage-inflation cycle begins
- Spain November preliminary CPI +3.2% vs +3.7% y/y expected
- Saxony November CPI +3.9% vs +4.5% y/y prior
- Bavaria November CPI +2.8% vs +3.7% y/y prior
- Germany October import price index +0.3% vs -0.1% m/m expected
- UK October mortgage approvals 47.38k vs 45.00k expected
- US MBA mortgage applications w.e. 24 November +0.3% vs +3.0% prior
- OECD sees global growth slowing further but hard landing to be avoided
- No delay currently expected to OPEC+ meeting tomorrow - report
Markets:
- NZD leads, AUD lags on the day
- European equities higher; S&P 500 futures up 0.4%
- US 10-year yields down 4.8 bps to 4.288%
- Gold down 0.1% to $2,039.32
- WTI crude up 1.9% to $77.85
- Bitcoin up 0.8% to $38,255
The story of the day is that bond yields continue to fall as rate cut prospects liven up among major central banks. We got softer inflation data from Australia, Spain and Germany, and all of that just compounds the narrative that we have seen to start the week. Fed Waller's comments are still reverberating, with Treasury yields retreating further today.
10-year yields broke below its 100-day moving average and that hints at a further rally in the works for bonds. But the dollar is managing to avoid a further beatdown, at least for now, in European trading. USD/JPY recovered from a low of 146.70 in Asia to 147.60 levels now but unless something changes up in the bond market, it is hard to see this bounce being sustained.
The greenback also pared early losses against the euro and pound, with EUR/USD falling from 1.1000 to 1.0980 and GBP/USD down from 1.2730 to 1.2690 currently.
At the same time, stocks are starting to wake up to the new week as European indices and US futures pushed higher during the session.
That isn't quite a factor for major currencies though, with the antipodeans showing a more mixed mood with the aussie punished after softer inflation data. Meanwhile, the kiwi is leading gains after a more hawkish posturing by the RBNZ earlier in the day.
In the commodities space, oil is looking for back-to-back days of solid gains as OPEC+ looks to have settled their differences ahead of the meeting tomorrow. Meanwhile, the breakout move in gold is held back temporarily amid the dollar's bounce for now with the precious metal trading flattish mostly just under $2,040.
