Macro data: The data from the US showed on Tuesday that Housing Starts and Building Permits declined by 1.6% and 7.7%, respectively, in September. On Wednesday, the People's Bank of China (PBoC) left its one-year prime rate unchanged at 3.85% as expected. The UKs Office for National Statistics announced that the Consumer Price Index (CPI) edged lower to 3.1% on a yearly basis in September from 3.2% in August. Furthermore, the Core CPI declined to 2.9% in the same period, missing the market expectation of 3%.
The benchmark 10-year US Treasury bond yield pushed higher during the American trading hours and ended up gaining more than 2% on Tuesday. Currently, the 10-year yield is staying relatively calm around 1.65%, helping the dollar stay resilient against its rivals. In the meantime, the US Dollar Index, which touched a three-week low of 93.50, is fluctuating around 93.70.
Wall Street: The S&P 500 Index closed fifth straight trading day in the positive territory and reached its highest level since early September at 4,520. The Dow Jones Industrial Average rose 0.55% and the Nasdaq Composite advanced 0.7%. US stock index futures are posting modest losses in the early European session. After the closing bell, Tesla will release third-quarter earnings figures.
AUD/USD and NZD/USD were the biggest gainers on Tuesday and they continue to edge higher on Wednesday. A negative shift in risk sentiment could cause these pairs to stage a sharp correction.
EUR/USD rose to its highest level in a month at 1.1670 but dovish comments from European Central Bank officials made it difficult for it to preserve its bullish momentum. The pair seems to have gone into a consolidation phase around 1.1650 on Wednesday.
GBP/USD showed no immediate reaction to September inflation figures and continues to move sideways around 1.3800 as investors assess the probability of a Bank of England rate hike before the end of the year.
Gold climbed above $1,780 on Tuesday but reversed its direction in the second half of the day as it remains one of the most sensitive assets to fluctuations in US T-bond yields. On Wednesday, XAU/USD is staying afloat in the green above $1,770.
Cryptocurrencies: As the trading in the first Bitcoin ETF kicked off on Tuesday, BTC gained more than 3% and stays within a touching distance of all-time highs near $64,000 on Wednesday. Ethereum bulls are still waiting for the ETH to break above $4,000.
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