- The Nasdaq 100 rose by 1.9%, while the DJIA increased by 2.0%. The S&P 500 also gained 1.7%. The US Department of Labor reported an unexpected drop in initial jobless claims, with unemployment claims falling to 213k, the lowest since April 2024. Federal Reserve Governor Lisa Cook mentioned that “the disinflationary process is continuing” and expects short-term interest rates to decrease. However, she emphasized that the size and timing of rate cuts will depend on inflation and labor market data.
- The STOXX Europe 600 rose slightly by 1.1%. Inflation in the UK picked up more than expected in October, mainly due to higher household energy bills. The year-over-year change in consumer prices increased from 1.7%in September to 2.3%, the highest since April. This data strengthened expectations that the BoE will likely maintain its current policy for the rest of the year. Markets also adjusted their forecast from three rate cuts to two in 2025.
- The CSI fell by 2.6%. Chinese banks kept their one- and five-year loan prime rates steady at 3.1% and 3.6%, respectively. This move was expected after banks cut the benchmark lending rates by a larger-than-expected 25 basis points in October, making borrowing cheaper for homebuyers and other loans.
Bitcoin is approaching the critical $100’000 mark, marking an impressive 135% gain so far this year.
Interestingly, despite this substantial increase, Bitcoin has only recently surpassed its 2021 highs when compared to the S&P 500.
This points to a potentially bullish outlook for Bitcoin and other high-risk assets for the remainder of the year, especially in light of the current conditions for the US Dollar Index and US 10-year Treasury yields.
Both are trading at key resistance levels - 108 for the Dollar Index and 4.5% for Treasury yields. A decline in yields and the US dollar could pave the way for further strength in risky assets, with Bitcoin likely to lead the way.
