CPI Misses Low. Gold Gains, Silver Shorts Start to Cover
Silver CTAs start to cover shorts aggressively
Bonus: Goldman’s CTA analysis for Gold, Silver, Oil etc.. the good stuff
What happened:
CPi came in cooler than expected. This will certainly make Powell less likely to raise rates one more time, and ( at least for now) the market interprets this as making them more likely to actually ease in the first half of next year.
Therefore, it’s off to the races for stocks (Ease), Bonds ( QT may have to stop) Silver (economic CTA buying), Gold ( lowering rates mean inflation will return)
Goldman on Gold CTA Activity:
Bonus: We are now seeing some Goldman Commodity CTA data.. Giving us something much more comprehensive to do CTA analysis with.
We will go over how to read these things later in the week. For Now:
Report attached
CPI Numbers:
Starting with the headline CPI, it came in at 3.2%, below the 3.3% expected, while MoM CPI also missed expectations, printing unchanged (0.0%), below the consensus of a 0.1% print, and sharply below last month's 0.4% print.
(pics Via Zerohedge)
U.S CPI (MOM) (OCT) ACTUAL: 0.0% VS 0.4% PREVIOUS; EST 0.1%
U.S CPI (YOY) (OCT) ACTUAL: 3.2% VS 3.7% PREVIOUS; EST 3.3%
A similar picture emerged on core CPI, where the October MoM print was 0.2%, below the 0.3% consensus estimate and down from the 0.3% increase in Sept, while YoY managed to drop from 4.1% to 4.0% missing expectations of an unchanged print, and the lowest annual increase since Sept 2021.
U.S CORE CPI (MOM) (OCT) ACTUAL: 0.2% VS 0.3% PREVIOUS; EST 0.3%
U.S CORE CPI (YOY) (OCT) ACTUAL: 4.0% VS 4.1% PREVIOUS; EST 4.1%
Here are Precious Metals Reactions:
SPOT GOLD GAINS AFTER U.S. CPI DATA, LAST UP 0.4%
SPOT SILVER GAINS AFTER US CPI DATA, LAST UP 1.8%
US DOLLAR INDEX DROPS 0.84%
Stock Market Reactions:
SHARES OF MAJOR WALL STREET LENDERS RISE PREMARKET FOLLOWING COOLER CPI REPORT
JPMORGAN & CHASE UP 1.4%, CITIGROUP UP 2%, GOLDMAN SACHS UP 1.6%, MORGAN STANLEY UP 2%, WELLS FARGO & CO UP 1.9%, BANK OF AMERICA CORP UP 2.4% PREMARKET
SP FUTURES UP 1.3%
Bond market initial reactions:
*US 2- TO 10-YEAR YIELDS FALL AT LEAST 15 BASIS POINTS ON DAY
FED-DATED SWAPS PRICE IN FIRST 25BP CUT FOR JUNE VS JULY PRIOR
TRADERS ERASE VIEW THAT FED COULD RAISE RATES ANY FURTHER, AND ADD TO BETS ON RATE CUTS IN 2024
Disclosure:
We are long Bonds, slightly long Gold and Silver, and yesterday put on a small GDX position after that news on the Gold mining Fund blow up. Looking to add more miners as time progresses.
We are biased long now, but can change our mind in a heartbeat…
This could be the beginning of a “Trend week”. If it is, then its very possible the bad news is all out ( knock wood)