US October CPI +6.2% y/y vs +5.8% expected

US October 2021 consumer price index data

  • Highest since 1990
  • Prior was 5.4%
  • m/m CPI +0.9% vs +0.6% expected
  • Prior m/m reading was +0.2%
  • Real weekly earnings -0.9% vs +0.8% prior
Core inflation:

  • Ex food and energy +4.6% vs +4.3% y/y expected
  • Prior ex food and energy +4.0%
  • Core m/m +0.6% vs +0.4% exp
  • Prior core m/m +0.2%
  • Full report

Note on the consensus numbers: I’ve seen some different estimates that were mostly lower than what I have here. So the numbers beat the estimates but perhaps by even more than is shown here.

The US dollar has jumped on the headlines around 20 pips across the board.
More details:
  • CPI food +0.9% m/m
  • Housing +0.7% m/m
  • Owners’ equivalent rent +0.4%
  • CPI energy +4.8%
  • Gasoline +6.1%
  • New vehicles +1.4%
  • Used cars +2.5%
Credit Suisse said a rise in housing of more than 0.5% would be a potential signal of more persistent inflation.

Dollar keeps slightly firmer to start the session

Dollar mostly higher so far on the day

The greenback is keeping in a firmer spot as we get things going in European morning trade, with USD/JPY inching back a little above 113.00 while EUR/USD has retreated from 1.1580 to a low of 1.1559 as the ranges stretch.
On the latter, sellers are looking to seize back near-term control now:
EUR/USD H1 10-11
The 100-hour moving average (red line) limited declines yesterday but that is giving way now though the pair is still largely caught in a relatively narrow range as a whole:
EUR/USD D1 10-11
Buyers are struggling to hold any firm push above 1.1600 in the past few days while sellers are finding it tough to keep pressure on daily support around 1.1525-29.
Elsewhere, cable is flat at 1.3553 while the loonie is holding a slight advance with USD/CAD down 0.1% to 1.2425. The antipodeans are among the laggards though with AUD/USD down to around 0.7355-60 while NZD/USD is down 0.3% near 0.7100.

China property developer Evergrande has a $148 million in coupons payment due today

China Evergrande Group is due to make coupon payments totalling US$148.1m by Wednesday US time.

  • for three dollar bonds
The end of 30-day grace periods is today, 10 November 2021.
Failure to make payment would be a default.
Evergrande have made payments due so far and there is no indication this one will be missed. If it is though it could trigger cross-default clauses among the builder’s $19.2 billion of outstanding dollar notes and give creditors more room to negotiate.
China Evergrande Group is due to make coupon payments totalling US$148.1m by Wednesday US time.

Oil calls Biden’s bluff

US EIA forecasts undermine White House talk

The US made subtle and not-so-subtle threats towards OPEC+ in the aim of boosting production and lowering prices but OPEC+ shrugged them off and now the US must either respond or lose face.
The market was thinking a response could come today with the release of the US EIA’s short-term energy outlook but if anything that report undermined the President’s case. The agency forecast that the crude market will be oversupplied next year.
With that, the market called Biden’s bluff. WTI crude oil is up $2.27 on the day to $84.20. That’s less than a dollar away from the October cycle high of $85.41.
In addition, the fundamentals continue to improve. The CEO of physical oil trader Vitol today said that demand is already back to 2019 levels.

“We are at or about 2019 levels now,” CEO Russell Hardy said.

He believes OPEC has 2-3 million barrels a day of spare production capacity, about what global demand will rise by next year.

Reuters Tankan – Japanese manufacturers’ sentiment hit a 7-month low in November

Ahead of the Bank of Japan’s (BOJ) Tankan quarterly survey due
on December 13 is the Reuters survey for the month of November.

November manufacturers index +13 vs +16 in October


  •  7-month low
  • supply bottlenecks weighing
  • chip shortage, high prices for steel of particular impact on the auto sector


Non-manufacturers index rises to +1 from -1 in October


  • 3-month high
  • an easing of coronavirus restrictions has been of benefit to service firms, but demand is yet to return to pre-covid levels


Manufacturers February 2022 index seen at +19


  • non-manufacturers +15


Poll of 502 firms
  • 254 responses
  • survey taken October 26 – November 5
Ahead of the Bank of Japan's (BOJ) Tankan quarterly survey dueon December 13 is the Reuters survey for the month of November. 

US major indices close lower. Snap win streaks.

Major indices move lower

The major US indices are closing lower and in the process are snapping some pretty long win streaks.
Highlights today:
  • The S&P snaps a 8 day win streak
  • The Nasdaq snaps a 11 day win streak
  • Nasdaq had its worse day in 2 weeks.
Tesla shares fell -$139.44 or -12% on the day.   Paypal was also a big loser today falling -$24 or -10.46%.
The final numbers are showing:
  • Dow down -112.26 points or -0.31% at 36319.97
  • S&P down -1.643 points or -0.35% at 4685.28
  • Nasdaq down -95.80 points or -0.60% at 15886.55
After the close, Coinbase earnings came out and missed. The stock is down nearly 10% in extended hours trading.
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