Markets in Asia and Europe mixed; New Bitcoin highs
Yields and Bonds fluctuate as Asian and European markets mixed. Global inflation pressures mount: U.S. CPI at 2.6%, Bitcoin peaks
United States and Market Yields
In October, U.S. inflation was expected to hit 2.6% year-over-year, pushing two-year Treasury yields to their highest since July. The core Consumer Price Index (CPI), which excludes food and energy, rose by 0.3% month-over-month, marking the third consecutive monthly increase and a 3.3% annual rise, indicating persistent inflation slightly above the Federal Reserve’s 2% target. Treasury yields responded, with the 10-year yields dropping to 4.37%, six basis points lower. Market sentiment suggested about a 75% likelihood of a Federal Reserve rate cut in December. The S&P 500 and Dow Jones Industrial Average each gained 0.1% to 0.2%, with the Nasdaq fluctuating.
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Europe and Bond Yields
European markets opened slightly higher on Wednesday, with Germany’s DAX up 0.2% to 19,067.59, France’s CAC 40 increasing by 0.2% to 7,242.33, and the U.K.’s FTSE 100 rising 0.1% to 8,035.44. The Stoxx Europe 600 was slightly down by 0.4%. Meanwhile, the 10-year yields for German and British bonds remained relatively steady, with Germany at 2.36% and Britain’s yields down by three basis points to 4.47%.
Asia
Asian markets reflected bearish trends as Japan’s Nikkei 225 declined 1.7% to 38,721.66, partly due to a 3.4% year-over-year increase in Japan’s corporate goods price index (CGPI), the highest since July 2022. The yen dropped to a low of 155 per dollar, while bond yields rose, with five-year Japanese bonds reaching a 15-year high. South Korea’s Kospi index plummeted by 2.6% to 2,417.08, impacted by a 4.5% drop in Samsung Electronics, marking a four-year low. In China, the Hang Seng in Hong Kong fell by 0.1%, while the Shanghai Composite saw a modest 0.5% gain. Australia’s S&P/ASX 200 lost 0.8% to close at 8,193.40.
Bonds and Treasury yields
U.S. Treasury yields have been rising steadily since September, driven by robust economic resilience and anticipation of higher inflation due to upcoming fiscal policies. The yields on two-year Treasuries reached recent highs but edged lower after October CPI data matched estimates. Oil prices showed slight fluctuation, with U.S. crude trading at $68.15 per barrel and Brent at $71.83. Gold prices rose by 0.6% to $2,614.21 an ounce, reflecting investor demand for safe-haven assets amid market uncertainties.
Corporate and Economic Highlights
Major U.S. companies reported mixed performance amid an inflation-driven economic landscape. Cava Group Inc. raised its full-year outlook as sales exceeded expectations, and Spotify achieved profit margin growth. However, Instacart’s Q3 earnings fell short of projections. Volkswagen expanded its investment in Rivian Automotive by $800 million, even as demand for electric vehicles softened. Key U.S. and global economic indicators are scheduled, including Eurozone GDP, U.S. retail sales, and China’s industrial production figures.
Cryptocurrency and Forex Markets
In the cryptocurrency sector, bitcoin reached a new high close to $90,000 before settling around $89,500, up 1.7% for the day, while Ether dropped by 1.4% to $3,234.95. Bitcoin’s surge aligns with the Trump administration’s pro-crypto stance. Meanwhile, the Bloomberg Dollar Spot Index was largely unchanged, reflecting stability amid inflation concerns.
The U.S. dollar strengthened to 155.09 yen but remained relatively flat against the euro at $1.0607.
The euro weakened for a fourth consecutive day, hovering around $1.06, its lowest level in a year.
Market attention was focused on upcoming speeches by the Bank of England’s Governor Andrew Bailey and Finance Minister Rachel Reeves, as sterling remained 7% down over two months.
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