US open: Wall Street extends losses as inflation soars
Fiona Cincotta November 10, 2021 8:54 AM
Stocks are set to fall as US CPI inflation jumped higher, rising by the most since 1990 on an annual basis.
Dow futures -0.22% at 36225
S&P futures +0.43% at 4664
Nasdaq futures -0.81% at 16092
FTSE +0.53% at 7309
Dax -0.12% at 16016
Euro Stoxx -0.24% at 4333
CPI soars - A Fed rate hike sooner?
US stocks are set for a weaker start after data revealed hat US inflation defied expectations and surged high in October. US CPI jumped to 6.2% YoY up from 5.4% in September and well above the 5.3% forecast. On a monthly basis CPI jumped 0.9%, up from 0.4% in September.
CPI is showing not signs of slowing, quite the opposite – which maybe isn’t that surprising given that PPI is at 8.6%.
Whilst the Fed say that they are focusing on employment – this number is going to get policy makers hot under the collar. The data is prompting expectations of a sooner move by the Fed, reflected in a rising US Dollar and under performance by the Nasdaq and high growth tech stocks, extra sensitive to interest rate expectations.
Banks are likely to have a strong session, along with other cyclicals – the Dow, whilst pointing to a softer start is performing better than the Nasdaq.
Where next for Nasdaq?
The Nasdaq is edging lower, it has slipped below the month old rising trend line dating after rejection at the rising trendline resistance dating back to August year and the new all time high of 16459. The move is bringing the RSI back from overbought territory. However, it would take a move below horizontal support at 15700 and the 20 sma at the same level to negate the near-term uptrend and expose the 50 sma at 15386.
FX – USD jumps, GBP slumps on Brexit fears
US Dollar is heading higher after 3 days of declines. Concerns over rising inflation across the globe boosted safe haven flows and US CPI prompts bets of a rate rise sooner.
GBP/USD is falling lower as Brexit headlines drag on the pound. The British government could trigger Article 16 ending co-operation with the EU over the Northern Irish border, potentially triggering a trade war with the EU.
GBP/USD -0.36% at 1.3509
EUR/USD -0.32% at 1.1556
Oil rises on global growth signals
Oil prices are easing lower after strong gains in the previous session. Oil rallied 2.4% following the release pf API crude stockpile data. The data revealed that stocks declined by 2.5 million barrels defying expectations of a 2.1-million-barrel build. The market is in wait and see mode to see whether the EIA data matches the API numbers and also to see whether the Biden administration takes action on surging oil prices.
Oil prices have rallied hard on tight supply and high demand as economies reopened and owing to the energy crisis. According to Vitol Group oil demand had returned to pre-pandemic levels and demand in Q1 2022 is likely to exceed that of the same period in 2019.
EIA inventory data is due later today.
WTI crude trades -0.5% at $82.52
Brent trades -0.25% at $84.06
15:30 EIA oil inventories
How to trade with FOREX.com
Follow these easy steps to start trading with FOREX.com today:
- Open a Forex.com account, or log-in if you’re already a customer.
- Search for the market you want to trade in our award-winning platform.
- Choose your position and size, and your stop and limit levels.
- Place the trade.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.