Inflation comes in hotter than expectations

Good Day.... And a Wonderful Wednesday to you! Well, I got my bag of liquids and a shot of B12, to help me... From the blood work I was dehydrated among other things... So, hopefully, the IV and B12 get me back to normal... Besides that, there was nothing else going on yesterday... No baseball, no football, nothing to keep me interested for long... I know that I said that I wouldn't be writing today, but my appt got cancelled since I was there yesterday... So, that's a good thing for me... as I don't have to get poked by needles again... Little Feat greets me this morning with the live version of their song: Dixie Chicken... 

The dollar is on a warpath again and started yesterday with the STUPID CPI printing a much stronger inflation number than was expected, and that means that not only was in store for a rate hike on 12/9, but there are also more coming... So, the dollar went on a warpath that took no prisoners, and gained 4 index points in the BBDXY to end the day at 1,227...

Gold and Silver got taken to the woodshed and were whacked..

Gold ended the day down $102 and closed at $4,034... Silver ended the day down $190 and closed at $52.41... I have admit that the thought that there will be more rate cuts surprised me at how much the moved the metals...

But then I remembered that the SPTs were out there, and they made sure that Gold/Siver got oversold in the RSI once again... I shake my head in disgust that they are allowed to put these shorts on... Nolt only are more rate hikes are on the way... But another thought crossed the minds of everyone... The 12/9 rate hike could be larger than they expected... 

The price of Oil is in trouble... and ended the day with an $87 handle.. While the 10-year Treasury took the CPI number and ran with it... The 10-year sits this morning with 4.99%.. I knew that where the 10-year was yesterday wasn't far from 5%, but C'MON! 

In the overnight markets last night... The dollar got bought some more and gained 2 index points and sits this morning at 1,229... This is ridiculous as the dollar is in trouble and the dollar trader are turning their collective backs on the fiscal problems that higher rates will bring us... 

Gold is up $10 to start the day, and Silver is up .77-cents.. To start the day today, before the dastardly SPTs step in... 

Now, if you're interested in politics then you'll have to go to another letter... 

What was up with the SPTs taking no prisoners again yesterday with Gold/Silver? I thought we entered a rally period for Gold/Silver... Maybe the chocolate cookies that my wife brought home to me last night will sooth the total dislike for the STPs... 

Or maybe Ed Steer telling you about the STPs will do the Trick... anyway, here's ED... "Well, it didn't matter whether the dollar index was falling or rising...or what the CPI number was, which I suspect 'da boyz' knew in advance...they were out to bomb the precious metals -- and take back all of Monday's gains in the process.

It was 'mission accomplished'...plus more, in that regard. But with very light trading volumes in both silver and gold, the question has to be asked as to how well they did from a COMEX futures market perspective."

Chuck again...well, that's all that took place yesterday so onto the BIG FINISH we'll go..

The U.S. Data Cupboard had the STUPID CPI to print and it showed us that inflation grew .4% in Rocktober but stayed at 3.9% annually... I guess the propeller heads putting together this data thought that inflation will magically disappear a year from now... I don't make this stuff up... 

And then all the Fed Heads out on the speaking circuit were talking about the rate hike and how they approved a 50 BPS rate hike instead of a 25 BPS hike... 

To recap...the dollar is on a warpath and that means the currencies are back in their sick beds... Gold/Silver got whacked by the SPTs again... And the STUPID CPI printed stronger than expected... 

Here's your Snippet: "After a subpar 3Y auction on Monday, today's 10Y auction - which followed another hot CPI print - was downright ugly.

Let's start at the top: the high yield of today's auction was 5.020%, which hit just as yields hit their peak for the day, with the 10Y rising more than 10bps above 5.0% for the first time in weeks. Still, this was a drop from last month's 5.317% (which was the highest in over 2 decades), but tailed the When Issued 5.010% by 1 basis point, the biggest tail since February. And with the auction pricing north of 5%, the coupon on the auction would be 5%, the highest since 2006.

The bid to cover was also ugly: sliding to 2.468 from 2.771, this was the lowest coverage since May.

But the internals were even uglier: Indirects plunged from a near record 80.3% in October to just 61.2%, the lowest since October 2023, as foreign buyers staged a bit of a strike.

It meant that someone else would have to step up, and sure enough, Directs soared from 17.1% to 29.0%, the highest since September 2013!

Dealers were left holding 9.77%, the most since May.

Overall, this was an ugly auction...

... easily on of the ugliest of 2026, and all it took was one hot CPI print and two hawks to put bonds back in the driver’s seat, and that's even ignoring the AI trade being back and once again draining demand for duration after a month of IG issuance that has blown away all records.

And since all key catalysts until the December rate hike are now done (except Friday's PPI which we don't expect will be much better), expect even more ugly auctions in the coming weeks."

Chuck Again... this is becoming a real problem for Congress, who will want to spend like a drunken sailor but they won't be able to because we haven't sold enough bonds... 

Market Prices 11/11/2026: American Style: A$ .6861, kiwi .5833, C$ .7025, euro 1.1114, sterling 1.3399, Swiss $1.2049, European Style: rand 16.566, krone 9.5666, SEK 9.9703, forint 328.12, zloty .9577, koruna 21.9057, RUB 82.87, yen 158.19, sing 1.2825, HKD 7.8434, INR 93.69, China 6.6857, peso 18.65, BRL 5.5557, BBDXY 1229, Dollar Index 102.55, Oil $87.36, 10-year 4.99%, Silver $52.88, Platinum $1,571.00, Palladium $1,101.00, Copper $6.22, and Gold... $4,044... 

That's it for today... I know the letter is short, but, this was a last minute thing, so I have an excuse letter from my mom... Ha! My mom, she was a beautiful young lady, and had 7 kids... she was a saint... She was my greatest supporter... And I miss her... Ok, enough of that... I hope you said thanks to a veteran yesterday, and maybe even told him or her that you appreciate their service... War takes us the finish Line today with their Great Song: Cisco Kid... I always stop to sing along with this song. I hope you have a Wonderful Wednesday today and Please Be Good To Yourself!