US Inflation and Employment both key for the FOMC, delivered good news.  Softening in price pressures were evident, and initial jobless claims still showed a tight labour market, but the numbers were higher than expected. CPI gained 0.4% for the headline and 0.3% for the core in October, following respective September gains of 0.4% and 0.6%. Much of the headline came from gas prices. This left headline CPI at 7.7% y/y from 8.2% in September, and the core rate to slowed to 6.3% y/y, after a bounce to a 40-year high of 6.6% y/y in September.  The Weekly Jobless Claims rose to 225k for the November 5 week, higher than the expectations of 220k and last weeks 218k.

The USD weakened significantly on the data as EURUSD rallied to 1.0150 from 0.9955, USDJPY sank to 143.20 from north of 146.00 and US500 Futs rallied to 3875 from 3765.  Gold shot up to $1735 and even BTCUSD recovered $17k.

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Andria Pichidi

Market Analyst

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