The USD retreats, oil prices weaken, equity markets are mostly down, and Treasury yields ease as markets remain US data-focused. The U.S. dollar gives back Wednesday’s CPI-driven gains as Treasury yields retreat, despite headline inflation accelerating to 3.7% and core inflation rising to 2.6%. The hotter data only modestly lifted expectations for an October Fed hike, leaving the greenback under pressure as markets continue to favour a pause this month. Global equity markets are mostly lower as the selloff in AI and semiconductor shares deepens, driving investors toward safer assets. Asian markets lead the declines, with sharp losses in South Korean technology stocks, while U.S. futures and European equities also weaken as investors question the sustainability of AI investment and remain wary of elevated financing costs. Elsewhere, oil prices weaken as recovering Gulf supply and a softer demand outlook outweigh continued shipping risks in the Strait of Hormuz. Gold firms, snapping a three-day decline as lower Treasury yields encourage some bargain buying, while Bitcoin falls as hotter U.S. inflation and renewed Fed tightening expectations weigh on risk-sensitive assets. Today’s economic calendar includes U.S. PPI and Core PPI inflation, retail sales, initial jobless claims, the Philadelphia Fed Manufacturing Index and Empire State Manufacturing Index, then later in the evening investors will be focused on speeches from BoE Governor Bailey and Fed Chair Warsh at the IMF meeting.
News headlines. Elon Musk says Trump is 'ultimately' responsible for any curbs on Ukraine's starshield systems. S&P 500 futures fall as traders await more US economic data, while South Korea Kopsi plunges 7%. Nvidia, AMX and Micron fall as AI stock sell-off deepens. Ukraine to resume strikes on Russia refineries, shattering hopes of an 'energy ceasefire'. US Treasury yields plunge after hot CPI print as investors await more economic data. Canada races to seal India trade pact by year-end, and deepen EU ties. TSX fells on Wednesday as minders take a hit, and as hot US inflation weighs on sentiment.
In currency markets. Against the USD, AUD is the strongest performer, extending its recent rally as markets continue to price a relatively hawkish RBA outlook despite softer employment data. The currency is also benefiting from broad USD weakness, lower U.S. yields and improved risk sentiment, while earlier RBA minutes kept the possibility of further tightening firmly in play. ZAR also outperforms, supported by the softer greenback and firmer precious-metal prices.
In commodity markets. WTI -0.29% | Nat Gas +2.06% | Gold +1.67% | Silver +1.70% | Copper -1.46% | Palladium +3.10% | Coffee -1.48% | Cocoa +4.22% | Soybeans -0.39% | Wheat -0.19%
CAD holds near multi-month lows as widening Fed-BoC policy divergence continues to favour the USD, particularly after hotter U.S. inflation reinforced expectations that the Fed may need to keep rates higher while weak Canadian employment has reduced the case for further BoC tightening. Canada’s economy lost 68,300 jobs in September and the two-year U.S.-Canada yield spread has remained near its widest levels since early 2025, keeping the loonie under pressure. Softer oil prices and generally cautious risk sentiment are additional headwinds, leaving CAD vulnerable despite occasional rebounds in the broader USD.
EURCAD edges higher, snapping a three-day decline as weaker oil prices weigh on the Canadian dollar while the euro stabilises. The cross remains constrained by lingering French fiscal concerns, which could limit further ECB tightening, but the softer Canadian backdrop and reduced support from crude are providing near-term support for EURCAD.
EUR holds its recovery against the USD as the greenback remains under pressure despite hotter U.S. CPI, with markets still expecting the Fed to remain on hold in October. The euro’s upside is tempered by weaker-than-expected euro-area Industrial Production, while attention now turns to today’s U.S. PPI data for further inflation signals. Investors will also look to Fed Chair Warsh’s discussion with IMF Managing Director Georgieva on Friday for any indication that the Fed could move before December.
GBPEUR is broadly flat in early trading after yesterday’s push to fresh 16-month highs, with the recent GBP rally showing signs of consolidation. GBP remains supported by comparatively firmer UK fundamentals and expectations that BoE policy will stay restrictive, while the euro continues to face pressure from French fiscal concerns; however, some easing in French bond stress and profit-taking after the recent move are keeping the cross contained.
GBP holds gains against the USD after UK GDP unexpectedly expanded in August, helped by stronger Industrial and Manufacturing Production. The rebound remains contained, however, after BoE Chief Economist Pill pushed back against expectations for an extended tightening cycle, while hotter U.S. CPI has revived some Fed hike risk. Near term, GBP is being supported by firmer domestic data, but relative BoE-Fed expectations remain the key constraint.
Payments International Inc. payment and foreign exchange services are provided by Global Currency Exchange Network Ltd. T/A GC Partners. Global Currency Exchange Network Ltd. is authorised and regulated by the Financial Conduct Authority under the Payment Services Regulations, 2017 (FRN: 504346). Registered as a Money Services Business, supervised by HM Revenue & Customs (“HMRC”) under the Money Laundering Regulations 2017. (Registered number is 12137189). Registered in England and Wales, company number 04675786. Registered office: 85 London Wall, London, EC2M 7AD.
