The US dollar exhibits a stronger position today as it recovers from the pullback experienced last week. While the US 10-year yield remains predominantly below the 4.0% threshold, the yen has emerged as the weakest among the G10 currencies, declining approximately 0.70%. This shift follows Takaichi’s historic appointment as Japan’s first female prime minister, raising concerns among investors regarding her proposed policy mix. The JGB market exhibited minimal fluctuations. Most emerging market currencies are exhibiting weakness. The Chinese yuan’s almost stable performance positions it at the forefront of the EM FX complex, awaiting the opening of the Latam market.

Gold experienced a significant rally of nearly 2.5% yesterday, achieving a new record price of approximately $4,381.50; however, it has since declined by nearly 2%. The price is currently maintaining levels above yesterday’s low of approximately $4,219. December WTI is currently in a consolidation phase, having rebounded from just under $56 to slightly above $57. The price peaked at nearly $57.30 today. Equities in the Asia Pacific region experienced an uptick following the rally observed on Wall Street yesterday. China’s CSI 300 demonstrated notable strength, achieving a 1.5% increase. Following a 1% rally yesterday, the Stoxx 600 remains relatively stable in the European morning, while US index futures show a slight decline. European 10-year yields have seen a slight decrease, while the US 10-year Treasury yield is almost a basis point lower, hovering around 3.97%. Last week’s low was approximately 3.93%, while the year’s low, established around “Liberation Day,” was nearly 3.85%.

The Dollar Index, having declined by slightly over 0.5% last week, is currently in a phase of consolidation. The asset has reached the 61.8% retracement level of last week’s declines, approaching 98.90 during the European morning session. Last week’s peak was just below 99.50. Hassett informed that the government shutdown is expected to conclude sometime this week. Investor sentiment appears to be cautious. In the meantime, the Philadelphia Fed’s October non-manufacturing survey is scheduled for release today. The figure was recorded at -12.3 in September. This year has seen a contraction, with only one positive instance last year, specifically in October 2024 when it reached 1.5. It is important to note that the October Philadelphia Fed’s factory survey indicated a significant decline in the business outlook, dropping from 23.2 in September to -12.8 in October. The latest data reflects the lowest performance since April.

The results of the non-manufacturing survey will be reported. The figure was recorded at -12.3 in September. This year has seen a contraction, with only one positive instance last year, specifically in October 2024 when it reached 1.5. The key focus for this week is Friday’s CPI. The median forecast survey indicates a 0.4% rise in the headline rate and a 0.3% increase in the core rate. The year-over-year headline rate will increase for the fifth consecutive month to 3.1%, up from 2.9%. The figure stood at 2.4% in September 2024. The rate is expected to remain stable at 3.1% for the third month in a row. The figure stood at 3.3% in September 2024. This exemplifies the overarching guideline and the rationale behind the Fed’s discussions on core inflation. The headline pace generally aligns with the core measure, rather than the reverse occurring. Indicative pricing of derivatives suggests that the market is optimistic about a rate cut next week, with expectations for an additional cut before the year’s end.