Perspective: Morning Commentary for November 10
November 10 – October CPI inflation data came in slightly hotter than expected this morning, with headline CPI rising 0.4% month-on-month and core CPI rising 0.3% month-on-month, both of which were 0.1% above the average analyst estimate. Year-on-year figures were not published due to last October’s government shutdown, but we can interpolate using the CPI index itself. If we take the average of last September and November’s CPI index of 324.461, it would imply a headline CPI increase of 4.0% year-over-year, which would be an acceleration from the 3.7% seen in September and the hottest reading since May. Given the major build-up of inflationary pressures already seen at the producer level, it’s no surprise to see the pass-through to the consumer taking place, as we’ve been pointing to for months. Stock futures are pointing to a lower open in classic turnaround Tuesday fashion as they look to take back some of yesterday’s sharp gains. The VIX is up 5.7% from yesterday’s close, currently sitting just above 21, though well below the recent highs above 28 seen last week. The dollar is looking at a turnaround Tuesday as well, up 0.3% to trade near 102 at the time of writing. Treasury yields are sharply higher to start the session, with 2-year yields up near 15-basis points to trade near 4.70%, 10-year yields up 9-basis points to trade near 4.955%, and 30-year yields up 6-basis points to trade just below 5.32%. Crude oil prices are continuing lower amid de-escalatory rhetoric coming from the Trump administration, with nearby WTI down 2.2% on the day to trade below $84.50 while nearby Brent is down 3.4% to trade near $89.40. Meanwhile, the ags are quietly lower at the break.
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