VOT Research Report
Market Analytics and Considerations
On Thursday, the euro gained ground versus the dollar after data revealed that an important indicator of U.S. inflation increased by less than anticipated in October, reducing hopes for the Federal Reserve to swiftly hike interest rates.
Core consumer inflation, which excludes volatile food and energy prices, increased at an annual rate of 6.3% in October, vs expectations for an increase of 6.5%, according to U.S. government data.
The euro increased from $0.9955 before the data to a high of $1.0085, up as much as 0.72%. The dollar dropped to 144.05 from 146.11 against the yen, a 1.6% decrease.
The yield on German 10-year bonds decreased, falling 12 basis points on the day to 2.06% from 2.162% prior to the data. In contrast to the 0.3% rise before the statistics, European equities increased, with the STOXX 600 jumping 2% to its highest level since September 13.
On Thursday, the Canadian dollar rose to a seven-week high against the U.S. dollar as data indicating a slower-than-anticipated increase in U.S. consumer prices boosted investor confidence.
After reaching its highest level since September 21 at 1.3370, the Canadian dollar was trading 0.9% higher at 1.34 to the dollar, or 74.63 U.S. cents.
Following the movement in U.S. Treasuries, the rates on Canadian government bonds fell throughout the curve. The 10-year bond briefly fell to its lowest level since November 1 at 3.202% before marginally rising to 3.229%, a decrease of 17.6 basis points for the day.
