Market Update 14/11/2024

Welcome to our daily market update, where we help keep you informed on the latest happenings in the world of FX. If you have any questions or would like anything further explained, please don’t hesitate to reach out to your account manager or email info@cafx.com

US equities saw late gains, with the key S&P 500 index rising 0.3%, while European equities edged down slightly, the Euro Stoxx 50 closed 0.1% lower, and the FTSE 100 inched up by 0.1%. Long-term bond yields increased across most major European markets, with the US 10-year yield also up 3 bps to 4.46%.

US CPI data for October in line with expectations offered some relief to traders concerned that a higher reading could delay US policy easing. The headline CPI rose 0.2% for the 4^th month in a row and increased 2.6% y/y marking the first annual acceleration since March. Meanwhile, the core CPI which excludes food & energy went up 0.3% for the 3^rd consecutive month. Minneapolis Fed President Neel Kashkari expressed confidence that inflation is headed in the right direction based on these figures.

Despite the market relief, the CPI report also highlights the slow, often frustrating nature of the inflation battle, as inflation has sometimes stagnated for months on its downward path. With headline numbers still elevated, inflation concerns remain, keeping some upward pressure on yields.

The USD continued its recent gains against G10 currencies, with the DXY now approaching its 2024 high set in April.

NZDUSD dropped below 0.5900 overnight and appears poised to test its August low around 0.5850. The primary support level is 0.5850, with the October 2023 low at 0.5830 being a key point, a break below this could fuel speculation about a possible drop toward the October 2022 low near 0.5500 – a level last reached during the initial COVID-19 downturn in March 2020. With no major data releases expected until the 27^th of November RBNZ meeting, the NZD is likely to track global market trends in the meantime.

Today’s economic calendar includes a speech by RBA Governor Bullock at the ASIC annual forum at 12:00 pm NZT, followed by Australian employment data at 1:30 pm NZT. Strong employment numbers could reinforce the RBA’s hawkish stance. Later in the evening, US PPI data will be released, which will help fine-tune estimates for the Fed’s preferred PCE inflation measure.

Here are the latest mid-market rates:

Chart of the day