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US stocks surge, NZ dollar rises on rate cut hopes

US stocks

Market dynamics shifted after unexpectedly weak US CPI data, which prompted a drop in Treasury yields and bolstered stock markets

The New Zealand dollar emerged as a strong performer among major currencies today, surpassing the lagging British pound and a mixed showing from the US dollar. Market dynamics shifted after unexpectedly weak US CPI data, which prompted a drop in US Treasury yields and bolstered US stock markets. Investors are now expecting a potential Fed interest rate cut by May.

In economic reports, analysts are forecasting a decline in the October US retail sales figures and PPI, with additional data on business inventories and crude oil inventories due for release. Meanwhile, China reported an increase in industrial output and retail sales, attributed to the Golden Week holiday and government liquidity interventions. Nevertheless, concerns linger over China’s economic recovery amid tepid business activity.

Inflation rates in the UK and industrial production figures in the European Union have fallen short of market expectations, contributing to the global economic uncertainty. Oil prices experienced a marginal drop after yesterday’s gain, which was prompted by lower-than-expected US inflation data. The American Petroleum Institute’s latest figures also pointed to a rise in weekly oil inventories.

In spite of these mixed signals, premarket trading in the US showed an uptick in stocks, with Target Corporation announcing earnings that exceeded expectations on earnings per share but fell short on revenue. This news comes as all major indices, including the Russell 2000, experienced gains after yesterday’s robust performance.

Elsewhere, Canada braces for a potential decline in manufacturing sales data for September. Equity markets across Europe and the Asia Pacific region ended higher, while yields on US debt markets made a modest recovery from their recent steep declines. European debt markets displayed mixed performance with benchmark 10-year yields.

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