The Morning Update

The USD advances, oil prices rebound, equity markets are up, and U.S. yields rise as investors digest firmer inflation data and reassess expectations for further Fed tightening. The U.S. dollar advances against most major currencies after hotter-than-expected October inflation and hawkish Fed commentary reinforced expectations for another rate hike in December. Headline CPI rose 0.4% m/m versus 0.3% expected, while core CPI also beat forecasts, pushing Treasury yields higher and keeping the greenback firmly supported. Global equity markets are broadly higher as investors move back into AI-linked stocks following strong CoreWeave results and robust demand for Anthropic’s IPO. Nasdaq futures lead the advance, while Nvidia is also set to rebound; European shares are firmer as technology and energy stocks outperform, although hotter U.S. inflation and higher rate expectations remain a constraint. Elsewhere, oil prices rebound as renewed uncertainty around U.S.-Iran negotiations restores some geopolitical risk premium, while gold also firms after its recent pullback. Bitcoin prices recover alongside the broader improvement in risk appetite. Today’s economic calendar quite as Canadian and U.S. markets observe Remembrance Day and Veterans Day.

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News Headlines. US tech stocks set to extend rebound after CoreWeave results. France and Belgium fall foul of Eurozone bond market's new divide. Spain roiled by first general strike in 14 years. Kyiv hit by water shortages as Russia targets Ukrainian infrastructure. Nvidia shares rebound 5% as Huang faces scrutiny ahead of earnings. CoreWeave stock pops 11% after outlook raise eases AI slowdown concerns. Treasury Secretary Bessent reportedly moved to military base over Iranian threats. Credit card debt climbs to a record $1.29 trillion, New York Fed research finds. Tankers continue to burn in the Middle East despite hopes for de-escalation. Bank of Canada officials say uncertainty doesn't rule out hikes.

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In currency markets. Against the USD, most major currencies are softer as hotter U.S. inflation and hawkish Fed commentary keep the greenback supported. JPY remains the notable underperformer, briefly touching a seven-week low and moving close to 160 per dollar, while AUD is the only G10 currency to edge higher as it rebounds modestly from recent lows.

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In commodity markets. WTI +0.94% | Nat Gas +0.61% | Gold +0.72% | Silver +3.36% | Copper +1.11% | Palladium +6.14% | Coffee -0.58% | Cocoa -0.57% | Soybeans -0.31% | Wheat +1.14%

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CAD remains under pressure near four-week lows against the USD as hotter U.S. inflation and fully priced expectations for a December Fed hike widen the rate differential against Canada. The loonie is also still digesting last week’s weak jobs report, which reduced the case for another BoC move in December, while the recent collapse in oil has removed an important source of support. Even with crude rebounding modestly today, interest-rate divergence remains the dominant driver for USD/CAD.

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EURCAD holds broadly steady with Canadian trading expected to remain light for Remembrance Day, when domestic bond and money markets are closed even though the TSX remains open. With local liquidity thinner, the cross is likely to take more of its direction from broader moves in the euro, oil and the USD rather than fresh Canadian catalysts.

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EUR weakens against the USD as hotter U.S. inflation strengthens expectations for further Fed tightening and pushes the Dollar Index to a near four-week high. The euro is also facing some uncertainty around the ECB leadership transition, with Klaas Knot increasingly discussed as a potential successor to Christine Lagarde and investors assessing how a change at the top could affect the policy outlook. Persistent French fiscal concerns and uneven Eurozone growth are adding to the pressure, leaving EUR/USD vulnerable while U.S. rate expectations remain elevated.

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GBPEUR remains largely sidelined, with the cross trading almost flat as neither currency has a clear near-term advantage. A modest rebound in oil is taking some support away from the euro, while GBP is also lacking fresh domestic catalysts; attention now turns to upcoming UK and Eurozone growth data and further ECB commentary for direction.

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GBP remains under pressure near one-week lows as hotter U.S. inflation and increasingly hawkish Fed expectations continue to support the dollar. The BoE’s own tightening bias is helping limit the downside, with Deputy Governor Clare Lombardelli signalling that further rate increases may still be needed as energy costs and domestic resilience keep inflation risks elevated. Attention now turns to Thursday’s UK GDP report, where a firmer growth reading would strengthen the case for additional BoE tightening, while a weaker print could quickly undermine support for the pound.