Inflation below 8% ahead of the year-end holiday, the Dow rose by 1,000 points. The high base inflation in 2021 and the disinflation of several goods and services in the Oct. period suppressed the US Headline Oct. YoY dropped to 7.7% (Vs. Sept. 8.2%). The slowing down of inflation is pushing the probability of an increase in the FFR Des. for only +50Bps (Vs. +75Bps), up from 52% to 85%, according to CME Fed Watch. Fed Pivot expectations on Des., also supported by depressed labor data, with US Initial Jobless Claims for the week ending Nov. 5, up by 3% WoW. Moreover, the market positively responds to the decline in inflation ahead of the year-end holiday. The Dow strengthened by 3.7%, with the Nasdaq up by 7.4% or leading Wall Street’s gains. The emergence of Fed Pivot sentiment also pushed up several commodities, such as oil and gold, along with pressure toward the DXY.
BI is back to Hawkish, with BI 7DRR Nov. up by +50Bps, according to a Bloomberg survey. Investors can take advantage of the Fed Pivot sentiment as a positive catalyst in trading this weekend amid the JCI being below the psychological level of 7,000. Technically, NHKSI Research projects that today’s JCI has the chance to move bearish due to its breaks below the MA10 & MA20. Meanwhile, the increase of food commodity prices in the Nov. period made BI to be projected rising the BI 7DRR by +50Bps in Nov., to 5.25% (Vs. Oct. 4.75%).
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