Treasury yields are the day’s biggest move once the basis point changes are scaled. The five year yield rose 18.2 basis points to 4.84 percent, the 10 year rose 15.1 basis points to 5.02 percent and the 30 year rose 11.8 basis points to 5.37 percent. The driver is in today’s inflation reporting: consumer prices rose 0.4 percent in October and core prices rose 0.3 percent for a third straight month, both a tenth above consensus, landing on the threshold Governor Waller set this morning for putting a 50 basis point December hike on the table (see today’s CPI story and the Waller story). The next test comes at 1:00 p.m., when the Treasury sells 42 billion dollars of 10 year notes into the repricing.
Tanker freight fell 9.38 percent to 528.34 dollars, the largest percentage move in the tables and a second straight heavy fall after Monday’s 13.82 percent drop. The decline extends the shipping side of the Hormuz normalisation in today’s commodities reporting: LNG traffic through the strait reached its highest since February, and Brent crude dipped below 90 dollars in the morning before trading at 91.98 dollars at midday, down 0.64 percent on the day (see today’s Brent story and the Hormuz LNG traffic story). Freight fell even though a tanker was struck by an unknown projectile off Oman today, a reminder that the market is pricing the flow recovery, not the incident rate.
Nvidia fell 6.52 percent to 167.02 dollars, extending a weekly fall of 19.19 percent. No story in today’s reporting explains the Nvidia move on its own. The wider technology tape fell with it, the tech sector down 2.43 percent, semiconductors down 1.94 percent and Microsoft down 2.90 percent, while Broadcom rose 1.90 percent against the sector.
The miner rally reversed. Silver miners fell 6.07 percent, gold miners fell 5.65 percent, uranium miners fell 4.46 percent, rare earth miners fell 4.15 percent and copper miners fell 3.84 percent. Today’s mining reporting showed that Monday’s gains, of the same size in the other direction, outran the metals underneath them; today the metals fell too, with gold futures down 2.12 percent to 4,027.1 dollars an ounce, silver futures down 2.51 percent to 51.24 dollars and copper down 1.56 percent to 6.23 dollars a pound, so the equities had neither leg to stand on (see today’s miner equities story).
Soybeans rose 3.70 percent to 1,226.0 cents a bushel and corn rose 2.62 percent to 450.8 cents. Today’s commodities roundup flagged the grains firming into Tuesday’s USDA reports, with soybeans up 1.18 percent and corn up 0.68 percent on Monday’s close; nothing in today’s reporting offers a fuller explanation for the size of today’s grain move.
The cross-market read is risk-off, and it runs through rates rather than growth. Yields rose across the curve, the dollar index rose 0.70 percent to 102.37, the S and P 500 fell 1.01 percent and the Nasdaq 100 fell 1.68 percent, while the Nikkei 225 had already closed up 2.33 percent before the inflation print. Energy kept its separate logic: oil and freight are still pricing the war premium out even as the inflation data price rate hikes back in. The morning’s configuration, calm yields and rallying equities, inverted on a single number.