Inflation worries from high US CPI data, sees bond yields higher and stocks dip and bounce

Intermediate

Macroeconomic/ geopolitical developments

  • The standout event last week was the US CPI data on Wednesday, which came in much higher than expected at 6.2% year-over-year, its highest level since 1990.
US CPI
  • This fuelled ongoing, underlying inflation concerns, seeing global stock indices setback (then bounce), whilst global bonds pushed to higher yields.
  • Tesla saw a steep decline after CEO Elon Musk reacted to a Twitter poll and announced he plans to sell some of his shares.
  • The Dutch government has ordered a partial lockdown to combat surging COVID-19 infections.
Coronavirus Netherland

Global financial market developments

  • US stock averages dipped from record levels from earlier November after the US CPI data release, whist European and UK indices stayed relatively strong.
  • US, UK and European yields sold off to higher yields in reaction to the US inflation data.
  • The US Dollar surged higher with the US Dollar Index hitting its highest level since July 2020.
  • US Dollar gains saw EURUSD and GBPUSD further sell off, to sustain short- and intermediate-term vulnerability.
EURUSD chart
  • Gold spiked even higher to start November, with risk now for a more bullish tone, maybe for a bullish range breakout.
  • Erratic Oil price action last week, still a potential topping pattern.
  • An erratic dip and bounce for Copper, but a negative tone within a broader range.

Key this week

  • Central Bank Watch: A quiet week for Central Banks with the Reserve Bank of Australia (RBA) Meeting Minutes are released on Tuesday.
  • Macroeconomic data: The standout data points are CPI data from the UK, Canada and the EU, Retail Sales data from China, the US, UK and Canada and the UK Employment report.
DateKey Macroeconomic Events
15/11/21Japan GDP; China Retail Sales
16/11/21RBA Meeting Minutes; UK Employment report; EU GDP; US Retail Sales
17/11/21UK CPI; Canada CPI
18/11/21EU CPI
19/11/21UK Retail Sales; Canada Retail Sales

Editor in chief

Steve Miley is the Market Chartist and has 29 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Mar... Continued

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