In US economic data, the consumer price index (CPI) rose by 0.4% in October (survey: +0.6%). Annual growth eased from 8.2% to 7.7% (survey: +7.9%), its lowest level since January. The core CPI (excluding food and energy) rose by 0.3% in October (survey: +0.5%). Annual growth of the core CPI fell from a 40-year high of 6.6% to 6.3% (survey: +6.5%). Initial jobless claims rose by 7,000 to 225,000 last week (survey: 220,000).
European sharemarkets jumped to their highest level since late August on Thursday after the release of slower than expected US inflation data. The continent-wide FTSEurofirst 300 index rose by 2.6%, notching its biggest percentage gain in five weeks. The UK FTSE 100 lifted 1.1%, as the British pound rallied against the US dollar, benefiting domestic-focused companies.
US sharemarkets surged on Thursday as signs of cooling consumer prices in October raised hopes that the US Federal Reserve would soon start scaling down the size of interest-rate hikes. The data prompted traders to adjust their rate hike bets, with odds of a 50 basis point rate hike in December jumping to 73.5%. Shares of Amazon (+12.2%), Apple (+8.9%), Meta Platforms (+10.3%), Microsoft (+8.2%) and Tesla (+7.4%) all soared. At the close of trade, the Dow Jones index was up by 1,201 points or 3.7%, the most since May 18, 2020. The S&P 500 index rose by 5.5%, the most since April 6, 2020. The Nasdaq index gained 761 points or 7.4%, the most since March 24, 2020.
US treasuries were stronger on Thursday (yields lower) after data showed US inflation cooled in October, supporting expectations the US Federal Reserve could slow its tightening pace. San Francisco Fed President Mary Daly and Dallas Fed President Lorie Logan welcomed the “good news” on inflation, but said the fight with rising prices is far from over. US 10-year yields fell by around 32 points to near 3.82%, its largest daily fall since March 2009. And US 2-year yields fell by around 30 points to near 4.33%, the largest daily decline since September 2008.
Major currencies were stronger against the US dollar in European and US trade. The Euro rose from lows near US$0.9936 to highs near US$1.0220 and was near US$1.0210 at the US close. The Aussie dollar lifted from lows near US63.86 cents to highs near US66.30 cents and was near US66.25 cents at the US close. And the Japanese yen firmed from near 146.58 yen per US dollar to JPY140.18 and was near JPY140.50 at the US close.
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Global oil prices rose by as much as 1.1% on Thursday as softer than expected US inflation data offset worries that renewed Covid-19 restrictions in China would hurt fuel demand. The Brent crude oil price rose by US$1.02 or 1.1% to US$93.67 a barrel. And the US Nymex crude oil price added US64 cents or 0.7% to US$86.47 a barrel.
Base metal prices advanced on Thursday with copper (+2.1%) jumping to the highest level since August after US inflation data came in cooler than expected, paving the way for the US Federal Reserve to slow down it aggressive rate hikes. Nickel rose 5.1%.
The gold futures price rose by US$40.00 an ounce or 2.3% to US$1,753.70 an ounce. Spot gold was trading near US$1,756 an ounce at the US close. Iron ore futures rose by US68 cents a tonne or 0.8% to US$88.19 a tonne.
Originally published by CommSec