Yesterday, the yields of ten-year US treasury securities at the moment exceeded the level of 1.69% per annum, but at the end of the day they fell by about 3 bps to 1.63% per annum. Today is a day off in the US, and yields remain at the same levels. US stock indexes closed mixed yesterday, tending to growth – the S&P500 rose by 0.23%, the Dow Jones fell by 0.03%, and the NASDAQ added 0.44%.
October data showed an unexpected decline in orders of durable goods in the United States. So, against the expected growth of 0.2% mom, the indicator decreased by 0.5% mom. At the same time, this decrease is mainly due to a drop in transport orders, and the indicator, excluding these components, increased by 0.5% mom. Wholesale inventories in October, unlike orders for durable goods, grew stronger than the consensus forecast – by 2.2% mom versus the expected growth of 1.0 m/m. Yesterday, data on the Core PCE price index, which is targeted by the Fed, was also published. After the September growth of 3.6% YoY, the indicator in October increased by 4.1% YoY. Such data coincided with the Bloomberg consensus forecast, and did not surprise investors – the market has to wait for more up-to-date price statistics for November. Yesterday, the weekly data on the number of applications for unemployment benefits in the United States surprised the most – the number of applicants immediately decreased by 70 thousand to 199 thousand. Thus, the weekly number of requests has become the lowest since 1969. Probably, such data are explained by errors in the correction for seasonality in connection with Thanksgiving, and next week the number of applications for benefits may return to more familiar levels of about 260 thousand applicants. In any case, investors will receive details on the situation on the US labor market next week, when the November labor statistics are expected to be published.
On Wednesday, the minutes of the last Fed meeting were also published, which did not surprise the market in general. It emphasizes that the current inflation is still mainly due to temporary factors, which, however, turned out to be more stable than expected. In any case, Fed members agree that the time has come to wind down the asset purchase program. At the same time, a number of participants in the meeting called for a higher rate of reduction in asset repurchase in order to be ready for an earlier rate increase. Yesterday, the same opinion was expressed by the head of the Federal Reserve Bank of San Francisco, Mary Daly. However, before such decisions, she would like to evaluate the statistics of the coming months. As for the expectations on the rate, M. Daly stated quite harshly yesterday that she would not be surprised by a rate increase twice in 2022. The tightening of monetary policy in the US is getting closer, and the market will especially monitor the November statistics on prices and the labor market.
Yesterday, Brent crude futures fell by 0.1% to $82.25/bbl. against the background of a strengthening dollar. The negative in the oil market was moderately strengthened by weekly data on reserves from the US Department of Energy. They indicated an increase in oil reserves by 1.02 million barrels. against their expected decline of 0.48 million barrels. However, the stocks of petroleum products decreased, which limited the negative from yesterday's statistics. Today, Brent futures are growing weakly and are trading around $82.35/bbl. Yesterday it was reported that OPEC+ in response to US intervention may decide not to increase production at the next meeting. At the same time, a number of sources later denied such plans. Uncertainty about the actions of the cartel remains high, and investors have to wait for the main OPEC+ meeting on December 2. In the meantime, we continue to expect Brent futures to remain at levels above $80/bbl in the coming days.