Dow Gains 1% as Dollar Slips, UK Inflation Due | Global Economy, Oct 21
The Dow rose 1.02% and the dollar index fell 0.2% on Tuesday as Brent settled at US$108.79. The Federal Reserve decides on 28 October. The post Dow Gains 1% as Dollar Slips, UK Inflation Due | Global Economy, Oct 21 appeared first on The Rio Times .
On Tuesday, Wall Street experienced a mixed session with the Dow Jones rising by 1.02% to 52,496, the S&P 500 increasing by 0.28% to 7,713, and the Nasdaq remaining flat at 26,425. The S&P 500 remains 1.4% below its record high of 7,819 set on October 6. The 10-year Treasury yield decreased by 2.4 basis points to 5.115%, and gold fell 0.44% to US$4,114 per ounce. The dollar index declined by 0.20% to 101.77, while the VIX dropped 6.13% to 17.31.
Brazil benefits from the lower dollar, as it eases imported inflation and strengthens the real. The Federal Reserve is set to meet on October 28, with the target range at 3.75% to 4.00% following a 0.25-point increase in September. Polymarket traders anticipate no change in the Federal Reserve's decision, with 86.5% probability at 11:13 p.m. ET on Tuesday, October 20, and 12.5% probability for a 0.25-point rate increase.
UK unemployment decreased to 4.7% in the three months ending August from 4.8%, and payroll employment rose by 13,000 in September, with regular pay growth staying at 3.7%. The UK's inflation for September is expected to be 3.4% from 3.1% in August. Japan's trade deficit for September was ¥536.6 billion (approximately US$3.4 billion at ¥158 per dollar), higher than the forecasted ¥181 billion. Exports increased by 16.7% year-over-year, while imports rose by 18.9%.
Brent crude settled at US$108.79 per barrel, a 0.7% decrease, while US crude fell 1.8% to US$101.79. Oil prices near US$109 keep inflation risks alive for importers in Latin America and Asia. Equities maintained their stability, and volatility diminished, but the US 10-year yield remains above 5%, and Brent is close to US$109. The variable to observe is whether the dollar's decline persists, as a weaker dollar aids the Brazilian real and other Latin American currencies.
Traders on Polymarket, a prediction market, give an 86.5% chance that the Federal Reserve keeps rates unchanged at their meeting on October 28, with 12.5% probability for a 0.25-point rate hike. These probabilities reflect traders' bets, not official forecasts.
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