Aussie Inflation Upsets Rate-Cut Bets as Wall Street Rallies; FX Eyes PBOC Fix, AI Stocks Diverge
Sticky Australian inflation reined in rate-cut hopes and underpinned the Aussie, while U.S. stocks extended gains on softer data and resilient earnings. FX traders now look to China’s daily yuan fix and mixed signals from AI-linked equities for the next cue on risk appetite.
Wall Street climbs on softer U.S. data, earnings resilience
U.S. equities advanced as traders leaned into a softer macro pulse and stronger-than-expected Q3 earnings. The Dow rose 1.43%, the S&P 500 gained 0.91% and the Nasdaq added 0.58%, a risk-on tilt that typically weighs on the dollar versus pro-cyclical FX and supports equities exposed to global growth. The backdrop: incoming U.S. data have been interpreted as dovish for the Fed’s path, helping ease financial conditions at the margins.
Australian inflation surprise props up AUD, challenges RBA doves
Australia’s October CPI landed firmer than expected at 0.0% m/m (vs -0.2% consensus) and 3.8% y/y (vs 3.6%), a reminder that disinflation is uneven. The print keeps the Reserve Bank of Australia in a hawkish holding pattern and makes near-term rate cuts less likely. The surprise should support AUD on crosses, particularly versus low-yielders, with rates markets inclined to price a longer plateau for policy.
PBOC fix in focus as China manages yuan
Traders are watching the People’s Bank of China’s daily USD/CNY fixing, with a Reuters estimate pointing to 7.0825. A steady-to-strong fix relative to models would signal ongoing appetite to anchor yuan expectations, limiting upside in USD/CNH and helping calm regional FX volatility. Any deviation could ripple across Asia FX and commodities sensitive to China’s demand outlook.
AI complex splits: Nokia extends run; Nvidia slips on TPU chatter
AI-linked equities diverged. Nokia shares have surged 43% year to date, buoyed by AI infrastructure demand and a lowly price-to-sales multiple near 1.37x, though analysts flag margin pressure even as top-line growth improves. Nvidia eased 2.5% amid talk of Meta and Google expanding in-house TPU efforts—headwinds that stoke concerns about hyperscalers’ vertical integration—even as the chipmaker defends its data-center AI dominance versus Alphabet’s Gemini 3 stack. Elsewhere, shares of NBIS jumped 218% on AI cloud demand and a reported $3 billion Meta deal; revenue grew 355% but the company remains unprofitable, with some analysts still projecting sizable upside.
Event-betting buzz returns: Polymarket odds tip 2025 comeback
Reports that the CFTC has greenlit forms of event wagering reignited interest in prediction markets. Traders are pricing roughly a 71% probability of a 2025 U.S. relaunch for Polymarket, a development that could catalyze fresh speculative flows at the intersection of crypto, retail activity and macro event risk. While not a traditional asset class, prediction-market liquidity can shape sentiment around elections, policy, and data releases, indirectly feeding FX and rates volatility, according to BPayNews.
Key points
- Australia CPI: 0.0% m/m (vs -0.2% expected) and 3.8% y/y (vs 3.6%); RBA cuts look less likely near term.
- PBOC seen setting USD/CNY fix near 7.0825 (Reuters estimate); watch CNH reaction and broader Asia FX.
- U.S. stocks higher: Dow +1.43%, S&P 500 +0.91%, Nasdaq +0.58% on dovish data and Q3 beats.
- Nokia up 43% YTD on AI momentum and a low P/S (~1.37x), but margins remain under strain.
- Nvidia -2.5% on hyperscaler TPU chatter; NBIS +218% as AI cloud demand surges; strong revenue growth but still loss-making.
- Prediction markets: traders price ~71% odds of a 2025 U.S. Polymarket relaunch amid talk of CFTC approval.
FAQ
How does the Australian CPI beat change the RBA outlook and AUD?
Hotter-than-expected inflation reduces near-term odds of RBA easing, likely supporting AUD as rate differentials stay favorable versus low-yielders. The market will watch wages and core measures for confirmation.
Why does the PBOC USD/CNY fix matter for FX?
The daily fix anchors yuan expectations. A stronger-than-model fix can suppress USD/CNH and steady Asia FX, while a looser stance could invite volatility across regional currencies and commodities linked to China’s growth.
What do the latest U.S. equity gains imply for the dollar?
Risk-on equity flows often coincide with softer dollar pressure versus cyclicals, especially if U.S. data are seen as dovish for the Fed. However, any sharp repricing in Treasury yields could quickly alter USD direction.
Why are AI stocks moving in different directions?
AI demand remains robust, but positioning and supply-chain dynamics matter. Nokia benefits from infrastructure exposure and valuation support, while Nvidia faces headlines about hyperscalers’ in-house chips that could trim long-term wallet share, even as its core AI lead persists.
What is the significance of Polymarket’s potential U.S. return?
If event betting expands under U.S. regulatory approval, prediction markets could draw capital and attention around macro events, influencing sentiment and potentially adding a layer of volatility around data releases and elections.
Last updated on November 26th, 2025 at 01:07 am
