On the foreign exchange market, the dollar index, which measures its evolution against 6 reference currencies, closed Wednesday at 98.34 points (+0.04%), while the euro remained stable (+0.01%) to $1.1008. Donald Trump, on the sidelines of his comments on US customs took the opportunity to criticize the Fed again and tried to take the credit of the Wall Street rally. He said that if the FED had collaborated with him, the stocks could have been much higher. Jerome Powell, on the other side, spoke to the Congress and said that the current monetary policy is broadly consistent with their prospects for moderate but sustainable economic growth.
The latest US economic data on inflation has been welcomed by investors overall. As a result, consumer prices rose faster than expected in October, due in part to rising prices for fuels, drugs and recreation. The CPI index rose 0.4% year-on-year and 1.8% year-on-year, but remains quite far from the 3% year-on-year pace of last year. Excluding energy and food, prices remained healthy, rising 0.2% over one month, and 2.3% year-on-year (vs. 2.4% in September).
The Swiss franc and the yen benefited on Wednesday from their safe haven status as the number of questions on trade negotiations increased, while the New Zealand dollar jumped after the maintenance of the key rate of the Central Bank of the country.
In the US bond markets, the yield on the 10-year T-Bond fell sharply by 6 basis points to 1.88% after the release of inflation figures. This rate had fallen to 1.53% a month ago amid fears of a recession, before rebounding sharply up to 1.92% last week thanks to the easing on the trade front, and after the Fed signaled a pause in its down cycle.
Oil started rising on Wednesday, after optimistic comments by OPEC for the oil market in 2020. The price of a barrel of US light crude (WTI) regained 0.85% to $57.28 on the Nymex (December futures contract), while North Sea Brent recovered 0.50% to $62.37 (January futures contract). Crude prices have recovered more than 9% since early October, but are still about 14% below their annual highs last April.
Crude prices have recovered more than 9% since early October in the hope of signing before the end of the year this trade agreement, which could signal an acceleration of global economic growth, and therefore the demand for oil gross.
The rise in black gold has, however, been slowed by the prospect of a new excess supply in 2020, and linked in particular to the rise in oil production in the United States. At its current price, oil remains at around 14% below its highest level of the year reached last April.