Macro Wrap

The DJIA, the S&P500, and the Nasdaq Composite Index fell 0.8%, 1.1%, and 1.9% respectively. The Eurostoxx 50 fell 1%. The Dollar Index dropped 0.5% to 99.73. EUR-USD rose 60 pips to 1.1550. The US 2Y yield fell 7bp to 3.56% and the 10Y yield dropped 8bp to 4.08%. The German 10Y yield fell 2bp to 2.65%. The UK 10Y yield fell 3bp to 4.43%. Brent crude oil prices edged down 0.2% to USD63.38. Gold slid 0.1% to USD3,977.

The Challenger Job Cuts survey saw US-based employers announcing 153k job cuts in October (September: -54k), its highest for the month since 2003, with layoffs mainly in the warehousing and tech sectors. Firms cited rising costs, softening consumer and corporate spending, and AI adoption as factors for the layoffs, in contrast to earlier ADP and ISM services data which pointed to a more optimistic picture. Overall negative for USD and broader market.

The Bank of England's MPC voted 5–4 to keep the Bank Rate at 4% on 5 November, as expected. Four members favoured a 25-bps cut. CPI inflation has peaked, and disinflation is aided by restrictive policy and softer pay growth. The subdued economy and labour slack reinforce disinflation. Risks to the 2% inflation target are more balanced, with future rate changes depending on data. Gradual rate reductions may occur if disinflation persists.