Rising Fed cut bets push long-term yields and USD higher [Video]

Ipek Ozkardeskaya Swissquote Bank Ltd

US inflation came in parallel to expectations, confirming that headline inflation in the US stagnated near 0.3% level for a third month, the yearly figure rebounded from 2.4% to 2.6% as expected, while core inflation remained stuck at 3.3%. The short-end of the US yield curve eased on expectation of further Federal Reserve (Fed) cut in December, but the long-end is pushing higher on bets that inflation won’t ease to 2% if the Fed cuts defying the inflationary Trump policies.

The US dollar pushes higher, the US dollar is now in or near the overbought territory against most majors. Big caps consolidate, small caps come under pressure, while the European indices don’t take advantage of weaker euro.

In energy, oil made a short attempt to the upside yesterday on a surprise decline in US oil inventories last week, but gains remain limited. Numerous failures to clear the $72.85pb Fibonacci resistance keeps the market in the hands of the bears, with the ambition to pish the price of a barrel to $65pb target.

Author

Ipek Ozkardeskaya

Swissquote Bank Ltd

Ipek Ozkardeskaya began her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked in HSBC Private Bank in Geneva in relation to high and ultra-high-net-worth clients.

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