U.S. CPI m/m at 0.1% vs expected 0.2%. Core CPI m/m at 0.1% vs expected 0.2%. The helped temper concerns about rising inflation for the time being, yet with total CPI and core CPI running above the Fed’s longer-run inflation target of 2.0%, it still left little reason to think the Fed is going to back away from a rate hike in December. Risk-off sentiment in markets continue to keep safe-haven Yen bid. Dollar was broadly weaker on Thursday. USDJPY down -0.17%, $112.09.
In ECB Minutes, policymakers ultimately concluded that the domestic economy was showing enough resilience to consider risks broadly balanced, even if some argued that the factors behind the recent slowdown may not be temporary as earlier thought, the ECB said in the accounts of the Sept 13 meeting. Policymakers also concluded last month that domestic cost pressures continued to build and broaden, indicating that inflation would rise, moving back toward the bank’s target of almost 2% after undershooting it for over five years. Euro up 0.61%, $1.1590. Sterling up 0.29%, $1.3234. USDCAD down -0.28%, $1.3032.
S&P 500 down -2.06%, 2,728.37. Nasdaq down -1.44%, 6,964.03. Nikkei down -3.96%, 22,587.50.
At session lows, the S&P 500 was down -2.7%. Stocks were able to reclaim some losses in the final hour of trading following a Washington Post report that Trump and Chinese leader Xi Jinping have agreed to meet at next month’s G-20 summit in Argentina with hopes of resolving their trade conflict.
Yields on longer-dated issues fell quite a bit more than yields on shorter-dated issues, leading to a flattening of the yield curve; the yield on the 2-yr Treasury note slipped one basis point to 2.85%, while the benchmark 10-yr yield fell nine basis points to 3.13%. That yield curve flattening weighed on lenders, which depend on the interest-rate differential between what they pay for deposits and what they make on loans. The S&P 500’s financial sector lost -2.9% and Trump blamed the recent selling on the Fed, which he says has “gone crazy” with its rate hikes. When asked if he is considering firing Jerome Powell, who he appointed, the president said he wouldn’t, adding that he’s “just disappointed.”
