Weekly Market Recap: November 8-12

High US Inflation and the relevant rise in US Yields and Fed rate hike bets, were the main themes during this week and the key drivers of market movement, while we also had some high profile companies reporting their quarterly financial results.

KEY DEVELOPENTS

US Inflation surged in October, as measured by the Consumer Price Index (CPI), published on Wednesday. Headline CPI rose to 6.2% y/y against 5.4% y/y in September, while Core CPI rose 4.6% y/y, compared to 4.0% in the prior month.

Earlier in the same day, China's CPI also showed big increase of 1.5% y/y and factory inflation accelerated to 13.5% y/y.

Australia's Employment report disappointed, with Unemployment Rate rising to 5.2% in October and the economy losing 46.3K jobs.

In the UK, preliminary data revealed lower Q3 GDP of 1.3% q/q, compared to 5.5% in the second quarter, while EU-UK dispute over the Irish border, creates fears for trade war.

The European Commission upgraded its 2021 Eeuro area growth forecast to 5.0%, from 4.8% in the summer projections and Inflation is forecasted to peak at 2.4% in 2021, before declining to 2.2% in the next year.

MARKET MOVEMENTS

Hot Inflation boosted the USDollar against its major counterparts. The Euro and the GBP set fresh 2021 lows against the greenback, while AUD and NZD dropped to November lows.

Reflation fears were detrimental for Wall Street as US Indices dropped after last week's rise. Their European peers performed better, as GER30 and FRA40 set all-time highs, and UK100 reached it best levels in more than a year.

At the time of writing USOIL was pressured and heading towards its third losing week, whereas XAU/USD was undeterred by the greenback's strength and posted 5-month highs.

CORPORATE ACTIVITY

This week we saw some high-profile quarterly results, while Disney's stock plunge and Ford's stock $20 milestone were in the spotlight. Read our StockWatch for more details.

WEEK AHEAD (GMT)

Next week starts with Retail Sales and Industrial Production Form China on Monday. Inflation will remain front and center, with CPI readings from the UK, Canada, Eurozone and Japan.

Market participants will also be looking forward to Retail Sales form the US, Canada and UK. On the earnings front, Nvidia, Lucid and Alibaba are some of the companies that will draw attention.

Nikos Tzabouras

Senior Market Specialist

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

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