Risk rally lifts Wall Street; Aussie inflation shocks, yuan fix in focus as traders juggle AI headlines
US stocks pushed higher after softer macro data reinforced a dovish read on the economy, while a hotter-than-expected Australian CPI jolted rate-cut hopes and put the Aussie dollar back in play. In Asia, traders are watching the People’s Bank of China’s closely managed yuan fix, with an estimate pointing to 7.0825 for USD/CNY.
Stocks climb on softer US prints and resilient earnings
The Dow Jones Industrial Average jumped 1.43%, with the S&P 500 up 0.91% and the Nasdaq Composite advancing 0.58% as investors cheered a run of benign US data keeping the “soft landing” narrative intact. The move was underpinned by stronger Q3 earnings that continued to outpace forecasts, reinforcing risk appetite even as sector performance turned more idiosyncratic.
AI-related headlines created dispersion in tech: Nvidia fell 2.5% amid fresh chatter around Meta and Google leaning further into in-house TPU development and Alphabet’s Gemini 3 trajectory, while NBIS rocketed 218% after unveiling a $3 billion AI cloud deal with Meta. NBIS reported a 355% revenue surge but remains unprofitable; several analysts still flagged substantial upside, underscoring the market’s willingness to pay up for AI capacity growth despite thin margins.
Aussie CPI surprises to the upside, challenging rate-cut bets
Australia’s October CPI printed 0.0% m/m (vs -0.2% expected) and 3.8% y/y (vs 3.6% expected), a hotter read that complicates the Reserve Bank of Australia’s disinflation narrative. Markets pared back rate-cut expectations, a shift that typically lends support to AUD crosses and nudges front-end pricing higher. With services inflation sticky, the bar for RBA easing remains high, keeping AUD volatility elevated into local data releases and policy minutes.
China’s yuan fix eyed as dollar dynamics cool
The PBOC is expected to set the daily USD/CNY reference rate near 7.0825, according to a Reuters estimate. A steady-to-strong fix would extend Beijing’s pattern of anchoring the currency and could dampen near-term USD/CNH upside. Asia FX traders are watching if today’s fix leans firmer to stabilize regional risk sentiment after the global equity rebound.
Prediction markets re-enter the frame
In a regulatory twist with potential market-structure implications, the CFTC’s greenlight for event betting has stoked interest in a US relaunch of Polymarket, with prediction markets implying roughly 71% odds of a 2025 debut. If sustained, broader access to event contracts could channel speculative flows into macro themes—from rate paths to election risk—adding a new dimension to hedging and sentiment gauging across FX and equity volatility.
Geopolitics hums in the background
Former President Donald Trump struck a bullish tone on the possibility of progress toward Ukraine-Russia peace, though he set no deadline for a deal. Headlines like these continue to simmer in the backdrop for energy, grains, and defense-linked trades, but immediate market impact appeared limited amid the risk-on tone.
Key Points
- Dow +1.43%, S&P 500 +0.91%, Nasdaq +0.58% as softer US data supports a dovish growth narrative.
- Australia’s October CPI: 0.0% m/m (vs -0.2% expected), 3.8% y/y (vs 3.6%); rate-cut hopes fade, AUD finds support.
- PBOC’s USD/CNY fix expected near 7.0825 (Reuters), keeping yuan stability in focus for Asia FX.
- Nvidia slips 2.5% on reports of Meta/Google TPU momentum; NBIS surges 218% on a $3B AI cloud deal despite ongoing losses.
- Prediction markets: CFTC approval sparks optimism; odds suggest a 71% chance Polymarket launches in the US in 2025.
- Geopolitical noise persists as Trump voices optimism on Ukraine-Russia peace talks with no timeline.
What traders are watching next
– AUD crosses and Aussie front-end rates as markets reprice the RBA path after the CPI surprise.
– The PBOC fix for signals on yuan management and spillovers to Asia FX risk appetite.
– US macro releases that could either validate or challenge the soft-landing view supporting equities.
– AI supply-chain headlines driving dispersion across semis, accelerators, and cloud infrastructure names.
FAQ
How did US equities perform?
Wall Street rallied with the Dow up 1.43%, the S&P 500 rising 0.91%, and the Nasdaq gaining 0.58%, helped by dovish US data and better-than-expected Q3 earnings.
What did the latest Australian CPI mean for the RBA and AUD?
October CPI beat expectations at 3.8% y/y and came in flat m/m versus an expected decline, reducing the likelihood of near-term RBA cuts and supporting the Aussie dollar.
Why is the PBOC’s USD/CNY fixing important today?
An expected fix near 7.0825 would signal Beijing’s commitment to currency stability, influencing Asia FX sentiment and cross-asset risk appetite.
Why did Nvidia fall while NBIS soared?
Nvidia dipped 2.5% on reports of Meta and Google advancing their own TPU strategies, while NBIS surged 218% after announcing a $3B AI cloud deal, despite remaining unprofitable.
What’s the significance of the CFTC’s move on event betting?
Regulatory approval could open the US to broader event-contract trading. Markets currently price about a 71% chance of Polymarket launching stateside in 2025, potentially adding new hedging and sentiment tools across macro and FX markets.
Reporting by BPayNews
