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• Prior month +0.6%
• Pending home sales 7.4% versus 1.0% expected
• Home sales index 75.8 versus 70.6 last month
• Sales up 2.6% year on year

Regionally:

• Northeast +6.5%
• West +9.8%
• Midwest 7.1%
• sound 6.7%

Of note is that mortgage rates have soared since the lows in September which were near 6.1%. The 30 year fixed mortgage is now up at 7.08%. This data is for the month of September so there might be a fall off next month.

This article was written by Greg Michalowski at www.forexlive.com.

Short sellers took aim at Super Micro (SMCI) earlier this year and it appears as though they were onto something. The company revealed today that auditor Ernst & Young quit and said it was “unwilling to be
associated with the financial statements prepared by management.”

“We are resigning due to information that has recently come to our
attention which has led us to no longer be able to rely on management’s
and the Audit Committee’s representations,” the accounting firm said.

Shares are down 34% premarket to $33.90 and back to flat on the year. The company was a Q1 darling as it rode the AI wave to a tripling of the share price.

Super Micro has still not issued its financial statements for this year, and there are reports that it is under federal investigation.

This article was written by Adam Button at www.forexlive.com.

Shares of Super Micro Computer are getting hammered after their auditor Ernst & Young sent a letter of resignation and has begun process of identifying a successor.

Meanwhile SMCI does not currently expect any restatements and disagrees with EY’s decision to resign.

Yikes.

Shares are currently trading down $-16.40 or -33.27% at $32.83

Looking at chip stocks:

• Nvidia shares are also under pressure with a decline -1.52%.
• AMD announced their earnings after the close yesterday and its shares are down -8.0% in premarket trading.
• Broadcom shares are down -1.17%
• Micron shares are down -1.83%
• Qualcomm shares are down -3.37%

Meanwhile Dell shares are trading up 7.00% as it is generally thought that if SMCI is cooking the books, that it benefits Dell who builds similar computers.

This article was written by Greg Michalowski at www.forexlive.com.

• Prior was 1.8%
• m/m HICP +0.4% vs +0.2% exp
• CPI +2.0% y/y vs +1.8% exp
• CPI +0.4% m/m vs +0.2% exp

These numbers are hot but were flagged by regional numbers earlier. As Justin wrote:

Just take note that the readings here are much higher than anticipated.
And this is likely to see an upside consideration to the estimate for
the national reading later. German annual inflation is expected to come
in at 1.8% in October but looking at this, we might see it move to
around 2.1% instead.

This article was written by Adam Button at www.forexlive.com.

• This budget raises taxes by GBP40 billion
• We will maintain BOE’s 2% inflation target
• OBR says budget will boost long term growth

Looking at the GDP forecasts changes from March:

• 2024: Up from 0.8% to 1.1%
• 2025: Up from 1.9% to 2.0%
• 2026: Down from 2.0% to 1.8%
• 2027: Down from 1.8% to 1.5%
• 2028: Down from 1.7% to 1.5%
• 2029: New forecast of 1.6%

For CPI changes from March:

• 2024: Up from 2.2% to 2.5%
• 2025: Up from 1.5% to 2.6%
• 2026: Up from 1.6% to 2.3%
• 2027: Up from 1.9% to 2.1%
• 2028: Up from 2.0% to 2.1%
• 2029: New forecast of 2.0%

The CPI forecasts are notably higher but the pound is at the lows of the day, down 77 pips to 1.2940.

This article was written by Adam Button at www.forexlive.com.

The Treasury maintained the language in the quarterly refunding announcement that said they didn’t expect a need to raise coupon auction sizes for the next several quarters. This was largely expected was coupled with no surprises for coupon sizes at:

• $58B in 3s
• $42B in 10s
• $25b in 30s

Overall the announcement includes $125 billion of refunding at $8.6 billion in new cash. A lone change is that 5-year TIPS will increase to $22B from $21B in December.

This article was written by Adam Button at www.forexlive.com.

• Prior quarter 2.8%
• Advanced Core PCE 2.2% vs 2.1% estimate
• PCE advanced 1.5% vs 2.5% prior
• Ex food and energy and housing 1.6% vs 2.3% prior
• PCE services ex Energy and housing 2.6% vs. 3.0% prior

The monthly PCE data will be released but the trend is to the downside. The headline PCE is below the 2.0% Fed target. The Core is also lower and closer to the 2.0% target at 2.2% (down from 2.8%). That is good news and supports the recalibration argument. The jobs report does not necessarily suggest that, however.

Looking at the markets:

• Dow industrial average is now lower by -55 points
• S&P index is up 3.3 points
• NASDAQ index is up 13 points

Looking at the US debt market:

• 2 year yield 4.151%, +3.3 basis points (at highs for the day)
• 5-year yield 4.118%, +1.4 basis points (at highs)
• 10 year yield 4.270%, -0.4 basis points
• 30-year yield 4.498%, -2.1 basis points

This article was written by Greg Michalowski at www.forexlive.com.

• Final Q2 GDP was 3.0%

Contributors and subtractors to the 2.8% growth:

• Consumption: +2.46% vs +1.90% prior
• Government: +0.85% vs +0.52% prior
• Net International trade: -0.56% vs -0.90% prior
• Inventories: -0.17% vs +1.05% prior

The final Atlanta Fed GDPNow reading was 2.8%.

USD/JPY was trading at 153.37 ahead of the report.

This article was written by Adam Button at www.forexlive.com.

OPEC+ plans to slowly reintroduce curbed production in December but a Reuters report said they could delay the hike by one month or more, citing three sources.

Brent crude was trading at $71.89 ahead of the report and immediately rose 50 cents.

This article was written by Adam Button at www.forexlive.com.

• Prior was +143
• Annual pay growth for job-stayers 4.6% vs 4.7% prior
• Job-changers’ pay gains 6.2% vs 6.6% prior
• Services +211K vs +101K prior
• Goods +22K vs +42K prior

USD/JPY was trading at 153.00 ahead of this report and jumped 38 pips afterwards.

“Even amid hurricane recovery, job growth was strong in October,” said Nela Richardson, chief
economist, ADP. “As we round out the year, hiring in the U.S. is proving to be robust and broadly
resilient.”

The strength in the report was broad based led by education/health services with the lone exception a 19K decline in manufacturing jobs.

This article was written by Adam Button at www.forexlive.com.

Headlines:

• 10-year Treasury yields stay in retreat after brief brush above 4.30% yesterday
• Euro pushes higher on German Q3 GDP beat, higher state inflation readings
• Germany Q3 preliminary GDP +0.2% vs -0.1% q/q expected
• Bavaria October CPI +2.4% vs +1.9% y/y prior
• UK budget preview: What to expect this time around?
• Eurozone Q3 preliminary GDP +0.4% vs +0.2% q/q expected
• France Q3 preliminary GDP +0.4% vs +0.3% q/q expected
• Italy Q3 preliminary GDP 0.0% vs +0.2% q/q expected
• Spain Q3 preliminary GDP +0.8% vs +0.6% q/q expected
• Spain October preliminary CPI +1.8% vs +1.8% y/y expected
• Germany October unemployment change 27k vs 15k expected
• Switzerland October KOF leading indicator index 99.5 vs 105.0 expected
• US MBA mortgage applications w.e. 25 October -0.1% vs -6.7% prior
• SNB chairman Schlegel: Ready to intervene in currency markets as necessary

Markets:

• JPY leads, GBP lags on the day
• European equities lower; S&P 500 futures up 0.1%
• US 10-year yields down 5.2 bps to 4.220%
• Gold up 0.2% to $2,780.24
• WTI crude up 1.2% to $68.00
• Bitcoin down 0.2% to $72,167

It was a packed session with plenty of economic data releases to work through. But ultimately, they didn’t do much to shake up the market landscape on the day.

With month-end approaching, that alongside upcoming US data releases continue to be key focus points in impacting trading sentiment on the week.

We got stronger inflation numbers from Spain and Germany for October but the ECB had already warned about that previously. Then, there was a surprise in German Q3 GDP as well. And put together, that saw EUR/USD nudge up slightly from 1.0835 to 1.0859 briefly.

However, large option expiries and the fact that one month’s worth of numbers are not enough to change the ECB outlook saw the pair retreat back to 1.0830 currently.

Instead, the dollar is weaker at the balance but it owes to a continued retreat in Treasury yields after the highs yesterday. 10-year yields briefly touched a high of 4.32% yesterday but are now down by roughly 10 bps to 4.22%. Month-end shenanigans in play?

In any case, that is weighing on USD/JPY, with the pair down 0.3% to 152.90 currently. Meanwhile, AUD/USD and NZD/USD are both up 0.2% to 0.6575 and 0.5985 respectively as well.

Elsewhere, the pound is the laggard as traders are positioning more negatively ahead of the UK budget announcement later. The fear is that chancellor Rachel Reeves might announce a budget that is deemed “fiscally irresponsible” and that could weigh on the currency and upset the gilts market. So, there is a potential for a sterling recovery if she manages to thread the needle. But it’s definitely a fine line to work that out.

In other markets, European indices are selling off while US futures are marginally higher. The latter is feeling optimistic after Alphabet’s earnings beat with four more of the Magnificent 7 still to report this week. In the commodities space, gold continues to shine as it closes in on $2,800 in the bigger picture as the ascend continues.

This article was written by Justin Low at www.forexlive.com.

• Prior -6.7%
• Market index 214.5 vs 214.8 prior
• Purchase index 137.8 vs 131.3 prior
• Refinancing index 630.0 vs 672.6 prior
• 30-year mortgage rate 6.73% vs 6.52% prior

After a sharp fall in mortgage applications in the previous two weeks, the latest reading is little changed but it’s important to look at the details. Refinancing activity took yet another sharp plunge as higher rates once again weighed on that particular component. The drop was only offset by a modest jump in purchases activity in the past week. The refinancing index is now at the lowest since the end of July.

This article was written by Justin Low at www.forexlive.com.