investingLive Americas FX news wrap 24 Oct; US CPI comes in below expectations

The latest U.S. CPI report showed inflation still running 100 basis points above the Fed’s 2% target, with both headline and core readings at 3.0%. Yet, since that was slightly below the 3.1% consensus, traders viewed it as a modest relief. The data helped reinforce expectations that the Fed will cut rates by 25 basis points at next Wednesday’s meeting.

Meanwhile, stocks extended their rally, with earnings over the first two weeks of the season coming in largely better than expected. Next week marks the pinnacle of earnings season, with heavyweights Apple, Amazon, Alphabet, Meta, Microsoft, Boeing, Chipotle, ServiceNow, ExxonMobil, and Chevron all set to report. As investors position ahead of those results, FOMO is clearly setting in, and the major indices — the Dow, S&P 500, and Nasdaq — are closing at new record highs.

But it’s not all rainbows and unicorns. Beneath the surface, geopolitical tensions and domestic gridlock remain key risks. The U.S. government shutdown continues, though traders largely expect it to be resolved without lasting economic damage.

On the geopolitical front, President Trump lashed out at Ontario over a local ad campaign criticizing tariffs, abruptly terminating U.S.–Canada trade talks, before later saying he would meet with Canadian PM Carney next week in So. Korea. The U.S.–China trade conflict also flared again, with Trump set to impose 155% tariffs effective November 1 — effectively a trade embargo – and China holding back on supplying rare earths and buying US soybeans. The last time such threats were made, both nations ultimately compromised; markets are betting /hoping on a repeat.

Relations with Russia continued to sour as well. Trump imposed new sanctions on Russian oil subsidiaries, sending crude prices sharply higher this week (up 7.25% this week). Moscow appeared unfazed — a Russian envoy suggested that “various forces, mainly the U.K. and Europe, are trying to derail direct dialogue between Putin and Trump.” That kind of rhetoric and blame game – away from Trump – could embolden Trump to play the “hero” card, something Putin no doubt anticipates (and may look to shootdown once again like he did in Alaska).

Despite the political noise, markets remain focused on the short term, assuming that Washington will reopen, U.S.–China talks will find common ground, and energy markets will stabilize. How long Russia can tolerate the economic pressure, however, remains an open question.

Looking at the closing levels for US stocks:

Dow industrial average rose 1.01% and 2.2% for the week
S&P index rose 0.79% and 1.92% for the week
Nasdaq index rose 1.15% and 2.31% for the week

Looking the US debt market the 10 year rate closed last week at 4.01% and is trading at 3.998% currently. The 2 year yield is at 3.479% after closing last week at 3.464% last week.

Crude oil is down -$0.39 on the day but up 7.2% for the week.

Gold had its first down week since August 11 week. The price fell -3.32% this week. Today the price was down -0.44%. Silver also had it’s first down week since August 11 and its worst week since the end of March. The price fell -6.22% this week.

The USD was mostly higher giving up the declines after the CPI data.

The change of the USD vs. the major currencies showed: