Global Market Quick Take: Europe – 11 October 2024

Key points:

• Equities: S&P 500 eased lower. Chinese stocks slumped
• Commodities: Oil rallies sharply, gold continued rebound
• Currencies: US dollar remains firm
• Fixed income: new highs in yield on 30-year auction, but closed well off highs
• Economic data: US PPI up after hot CPI yesterday

The Saxo Quick Take is a short, distilled opinion on financial markets with references to key news and events.

Macro:

• Hotter than expected core US inflation boosts US yields, US dollar. The US Consumer Price Index (CPI) rose by 0.2% month-over-month, matching August's increase but above the 0.1% forecast. Annual core inflation unexpectedly edged up to 3.3% from 3.2%, while the monthly core inflation rate remained steady at 0.3%, above the forecast of 0.2%. This took expectations for the November FOMC lower still, with the market now only pricing 85% odds of even a 25 basis point cut. Fed officials are sending conflicting signals. Story. 
• Hurricanes hit US weekly jobless claims, which rose to 258,000, far above expectations and the prior 225k level, but most of this was down to the impact of the recent Hurricane Helene, and with the latest Hurricane Milton impacting millions across Florida in recent days, we can expect storm effects to impact more of this weekly data set in the near term.
• Europe: France is sharpening up measures that will weigh heavily on growth next year as the focus is on both cutting spending and raising taxes. Story. 
• Calendar today: US PPI up at 1230 GMT and Canadian employment data at 1230 GMT.

Equities: 

• US stocks closed slightly lower on Thursday after the hotter-than-expected inflation report, adding uncertainty to the Federal Reserve's November rate decision. 
• Tesla’s Elon Musk demonstrated the coming Tesla robotaxi at a heavily-anticipated event very late yesterday in the US. The new vehicle will note have a steering wheel or pedals and is slated for availability in late 2026 at under USD 30,000. Story. 

• China: equities slumped again in China ahead of an important announcement this weekend on the composition of a coming fiscal stimulus package, seen coming in below USD 300 billion equivalent. One article points out that much of the recent market rally in China has been driven by margin financing, an enhancer of volatility in both direction. Story.

Earnings: 

• The Q3 earnings season kicks off in earnest today, with the largest US banks reporting today and early next week.

• Earnings today: JP Morgan, Wells Fargo, BlackRock, BNY, Fastenal

Commodities: 

• Brent crude oil jolted more than three dollars per barrel higher yesterday at one point before easing back, at least in part on the unknown scale of Israel’s anticipated response to Iran’s recent missile attacks.
• Gold continued its recent rebound after bottoming out above 2,600, trading this morning mid-way between the 2685 high and local support.
  

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